China Protects Customers from 13 Cent Airfare?

Katherine Mangu-Ward | December 19, 2006

The scourge of cheap airline tickets rears its head in China. The government rushes onto the scene to save the Chinese from the horror of promotional 13-cent airline tickets:

Spring Airlines, set up last year by travel agent China Spring International, sold more than 400 tickets on a new route between Shanghai and the northern city of Jinan for just 1 yuan ($0.13), the Beijing Times said. But that went against a 2004 rule — designed to help carriers' bottom lines after a vicious price war — that the maximum discount an airline can offer is 45 percent off a government-set base price, the report added.

A standard one-way ticket between Shanghai and Jinan costs 760 yuan ($97.10), excluding tax and fuel surcharge. The Jinan government said it would fine Spring Airlines' local travel agent branch 150,000 yuan ($19,160) as a punishment, though the company denies wrongdoing and will appeal, the newspaper said.

The case underscores the difficulty facing Chinese low-cost airlines, which are trying to model themselves on the likes of Ireland's Ryanair in bringing cheap no-frills travel to the world's most populous nation.

China's airline industry is dominated by three main state-run carriers, with which a clutch of low-cost airlines are trying to compete.

As Rational Review points out, the really scary part about this story is that the article above could easily be describing a nearly identical squabble in the United States.

Comments

|12.19.06 @ 12:36PM|#

China Spring's punishment will include having Rosie O'Donnell do all their TV commercials from now on.

|12.19.06 @ 12:42PM|#

Man, I sure do miss those $0.99 Ryanair flights.

ed|12.19.06 @ 1:07PM|#

Rosie O'Donnell do all their TV commercials

So would she be the face -- or the ass -- of China Spring?

China Law Blog|12.19.06 @ 7:45PM|#

Communists. Can't live with them, can't live without them.

|12.20.06 @ 5:17AM|#

walmart will do it next....