Ticket prices between Shanghai and Beijing dropped over 40 percent on August 10, the first decline since five domestic carriers entered into a cooperation agreement on August 6 designed to streamline travel between the two cities.

Ticket prices between Shanghai and Beijing dropped over 40 percent on August 10th, the first decline since five domestic carriers entered into a cooperation agreement on August 6 designed to streamline travel between the two cities.

The listed ticket price on ctrip.com, one of the most popular national online booking services, fell to as low as 340 yuan (US$45) after a generous discount of 70 percent from Hainan Airlines. This is in sharp contrast to the previous four days, when airline ticket discounts from Shanghai to Beijing hovered around 10 percent.

Air China, China Eastern Airlines, Shanghai Airlines Co Ltd, China Southern Airlines Co Ltd, and Hainan Airlines have rescheduled their daily flights to guarantee departure every half-hour. Passengers traveling between the two cities are now able to change their flights among the five airline companies if they encounter delays.

Ticket prices increased 10 to 30 percent after the cooperation began among the five airline companies. According to industry insiders, the narrow range of ticket prices would help the airlines to push forward with their cooperation. However, passengers alleged the cooperation was just an excuse for the carriers to raise their ticket prices.

With the cost of a ticket ranging from 790 yuan (US$104) to 1130 yuan (US$150), air travel became less attractive compared to railway traffic, whose single 10-hour tour between Beijing and Shanghai is priced at no more than 600 yuan (US$79). On August 7, the Civil Aviation Administration of China expressed its expectation for the five airline companies to readjust their ticket prices in a bid to enhance competition.

An official from China Southern Airlines Co Ltd said the high discounts from 60 percent to 90 percent make it impossible for airline firms to profit in the busy season, like June and August, when the rates of occupied seats in flights are high.

The cooperation is still in the initial stage, with trial operation scheduled through October 27. Flights of Air China and China Eastern Airlines dominate the route. The two companies have 25 flights flying in a single route between Beijing and Shanghai, while the other three companies only have 10 flights.

(China.org.cn by Wu Qin, August 10, 2007)