Chinese Domestic Routes Likely to Get Cheaper

China's aviation regulator has relaxed air fare restrictions for the first time in nearly a decade by allowing airlines to set prices as low as they want on 31 domestic routes.

The air fare reform is the first since 2004 when carriers such as Air China, China Southern and China Eastern were allowed to set prices on most routes within a specified band.

The change, effective from October 9, applies to 31 routes including PEK-NKG and PVG-TSN, the Civil Aviation Administration of China said on its website.

This is intended "to give customers more choice," a CAAC spokeswoman told Reuters news agency on Thursday.
Since 2004, airlines have been permitted to charge up to 25 percent more or 45 percent less than prices set by the regulator.
Removing the price floor is unlikely to have a major impact on the profitability of domestic carriers, which have been struggling as the economy slows, said Haitong Securities analyst Yu Nan.