Aviation News
- Airline fined for cheap tickets
Date: 20-Dec-2006 Sources: (Shenzhen Daily)
CHINESE authorities have fined a low-cost airline almost US$20,000 for selling tickets for one yuan (US$0.13) as part of a promotion, saying the company broke national pricing rules, a newspaper said yesterday.
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, capital of Shandong Province, for just one yuan, 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, excluding tax and fuel surcharge.
The Jinan government said it would fine Spring Airlines' local travel agent branch 150,000 yuan as a punishment, though the company has denied 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.
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