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Airfare discounts falter
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AIR travellers will be disappointed to hear that, following a meeting held in Wuhan on Tuesday, the current agreement concerning airfares will continue, which in effect prevents the much-anticipated discounts in ticket prices on domestic routes.
To regulate the air transportation market, according to insiders, a total of 150 airlines will join the united operation agreement during the period from March 25 to October 27, accounting for over 60 per cent of all domestic airlines.
The agreement, which took effect a year ago, drew in 108 participants initially. Airlines joining the agreement get a contracted slice of the total revenue of the united operation group. The practice effectively stops price wars and keeps fares stable.
An official from the Civil Aviation Administration of China (CAAC) commented that despite its apparently anti-competitive nature, the expansion of united operation actually prepares for the expansion of discounted routes.
Open discounting has been a significant step in the process, which will be undertaken in three stages: united operation, open discounting, and floating airfares completely determined by the market.
The official also stressed that the focus for the time being shall be laid on disciplining the market and banning unofficial discounts.(Dawn Li)
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