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| Public hearing on domestic airfares |
| CCTV.COM 2003-07-15 12:07:04 |
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Some members of the public will have their say today (Tuesday) in Beijing on planned changes to domestic airfares. More than a dozen members of the public are on hand this morning at a long－waited five－hour hearing which is in progress to look at how the country's air carriers price their tickets.
Fifteen people from various sectors of society are voicing their opinions on the proposed scheme, which will decide how much scope airlines can have to raise and cut ticket prices. The hearing is organized by the State Development and Reform Commission. Authorized by the central government to oversee economic development and pricing reform, the commission has proposed that airlines be allowed to raise ticket prices by a maximum of 25 percent or cut them by up to 40 percent. The benchmark price for every passenger is 0.75 yuan per kilometer.
The price hearing discusses a multi－tiered ticket pricing system, under which airlines can charge different ticket prices in peak and off seasons, and according to flight schedules and plane models.
China's air ticket pricing management has witnessed a transformation from strict government regulation to a gradual relaxation. In 1992, the Chinese airlines followed government－supervised price system, with the maximum discount set at 10 percent. This amount was enlarged to 40 percent in 1997. However, a severe price war ensued that threatened the viability of the industry, and measures to curb massive undercutting were introduced in 1999. These were then relaxed again in the year 2000, as legislators began preparing the industry for imminent market changes.
Consumers have widely welcomed the hearing. Some of them believe the new system fits the rules of a market economy, giving airlines more flexibility to cope with market changes. Others believe that they will benefit from competition, which will drive prices down, and that is what most consumers really want.
The hearing, originally scheduled for April 24, was postponed because of the SARS epidemic.
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Editor: Xiao Wei CCTV.com
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