China Protects Customers from 13 Cent Airfare?


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.