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Air-fare price war escalates
2/12/2005 17:31

Wendy Zhang/ Shanghai Daily news

Traveling by air costs even less than by rail, thanks to an intensified price war between airlines and in spite of fuel surcharges, eastday.com reported today.
Discounts of up to 80 percent are being offered on fares from Beijing to Guangzhou and Shenzhen, marking a record low for the past several years.
China Southern Airlines and Air China are selling flights from Beijing to Guangzhou at only 340 yuan (US$42), or 80 percent-off. The fare from Beijing to Shenzhen was also cut by 80 percent to 350 yuan.
By comparison, the soft-sleeper fare from Beijing to Guangzhou is 705 yuan, while it is 467 yuan for a hard-sleeper from Beijing to Shenzhen.
From November 7 to December 31, it costs only 199 yuan for flights from Shijiazhuang to Harbin if booked five days in advance, while the normal price is 1,200 yuan. The two-hour flight costs the same as the corresponding hard-seat train, with a hard-sleeper rising to 350 yuan, while the rail journey takes as long as 19 hours.
Such low prices are very rare in the Chinese aviation market, said an industry analyst.
Airfare from Shanghai to Guangzhou slumped by 45 percent to only 700 yuan on November 2, with those booking several days in advance enjoying up to 60 percent-off.
Regulations issued by the Civil Aviation Administration of China (CAAC) state that discounts offered on domestic air-routes, except for tourism purposes, must be no more than 45 percent. However, the regulation seems to exist in name only, the analyst pointed out.
In practice, CAAC is not strict in its supervision of airfares, and airlines adjust their prices by themselves. They usually set a stable price level for the same routes over a certain period of time, which they stick-to only in peak seasons. Off-peak, however, airlines will offer hefty discounts to attract passengers, the analyst explained.