2018-06-28

China Removes Airline Ticket Price Controls, Prices Jump

21st Century: 民航票价市场化改革落地,北上广深互飞全线涨价
The new round of commercialization of civil aviation fare market reforms entered the stage of landing.

Recently, the 21st Century Business Herald reported the price of the domestic "four major aviation routes" (including shared flights) in July. The data shows that in the 306 marketized routes opened earlier this year, there are already more than 60 route prices. It has been raised, and the rate of increase has been more than 9.5%.

On January 5 this year, the National Development and Reform Commission and the Civil Aviation Administration jointly issued a notice and decided to expand the scope of the market-adjusted price route, adding 306 new routes to the original. Exceeding expectations, the route opened up this time was not only numerous but also of high quality. It covered major routes including the first-tier cities.
From June 25th to June 26th, China Southern Airlines (600029.SH), China Eastern Airlines (600115.SH) and Air China and other airlines have successively raised the price of full-price tickets for the economy class on the Beijing-Shanghai route from The original 1,240 yuan was raised to 1,360 yuan.

The Beijing-Shanghai route is hailed as the most profitable "golden route", with the number of flying flights and passenger traffic ranking first. According to CADAS, a civil aviation data analysis agency, between January and April 2018, there were nearly 10,000 flights on the Beijing-Shanghai route, with 2,322,200 passengers and an average passenger load factor of 89.95%.

Due to the majority of public business travelers on the route, the price sensitivity is relatively low, so the route is considered to be one of the routes with the most price increase space. In contrast, the Beijing-Hangzhou route began to implement market-based pricing in 2013. At present, full-price ticket for economy class has reached 2,200 yuan.

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