A tie-up between five domestic carriers to offer discounted tickets on the Shanghai-Beijing route was grounded after a notice was served to the airlines by the Civil Aviation Administration of China.
A staff at one of the local China Eastern Airlines ticketing offices admitted that they had received an order from the eastern branch of CAAC.
"We stopped giving discounts after that," the staff said.
On Friday, China Eastern, Shanghai Airlines, Air China, China Northern Airlines and China Xinhua Airlines - all the five carriers that operate on the busy Shanghai-Beijing route - announced as much as 40 percent discounts on the route without getting the nod from the industry watchdog.
The joint effort by the carriers was an attempt by them to curb various under-the-counter discounts that have thrown the domestic airfare market into a disarray.
"The five airlines filed an application with the Civil Aviation Administration of China late last month asking for approval to introduce open discounts in the country's busiest route," said Gao Pei, manager of the marketing and sales department of China Eastern. "We hope the joint action taken by the five airlines could be effective to help regulate the domestic airfare market."
Under the plan, passengers departing from Hongqiao airport would receive as much as 25 percent discounts, while those flying from Pudong airport stood to gain up to 40 percent discounts.
A one-way Shanghai-Beijing ticket now costs 970 yuan (US$117).
This is the second time that domestic airlines have asked for discount approval on the Shanghai-Beijing route from the CAAC. Last July, Air China and China Eastern filed an application but failed to get the nod.
An industry source, who declined to be identified, said the CAAC may give some thought to their request, but added it would be unwise on the airlines part to violate the rules before winning the approval.
A week ago, CAAC announced that no open airfare discounts will be allowed, especially during the 40-day Spring Festival, which is normally a peak travel season.
At present, a total of 15 air routes, including five involving the city - Shanghai to Guangzhou, Shenzhen, Haikou, Chongqing and Sanya - have been allowed to offer discounts by the CAAC.
But industry watchers said the latest joint effort by the five airlines may prove effective to curb those under-the-counter discounts.
( eastday.com February 4, 2002)
