Consumers, consulted for the first time, demand lower fares
Regulators are told that more people could afford to fly if the airlines were granted flexibility in setting prices
In a revolutionary step aimed at injecting competitiveness into mainland aviation, regulators held an unprecedented meeting with consumer groups yesterday - taking in both their criticism as well as advice, ahead of finalising the nation's new air ticket pricing system.
'For the sake of creating a more transparent, democratic and scientific pricing system, the State Council Civil Aviation System Reform Working Group welcomes input from the public,' said Li Dekun, the Xinhua news moderator who chaired the meeting, which was carried live over the news agency's website as well as on radio stations around the country.
The State Council is proposing a new system that will allow market players to decide their own pricing but is setting a 25 per cent ceiling on price rises and a 40 per cent floor on price cuts. The new rules are an attempt to inject competition and standardisation into the air travel industry.
Yesterday's meeting involved seven representatives from consumer groups as well as officials from regulatory agencies.
Consumer groups have often complained about the high cost of domestic travel. Only people with annual incomes of 20,000 yuan (HK$18,845) or more can afford to fly, they said, which meant trains or buses were the only viable long-distance travel options for the majority. The average annual per capita income in mainland cities is about 8,000 yuan.
'We must build a transparent pricing structure in China,' said Liu Guangzhen, a professor from Shanghai and a consumer group representative.
'Ticket prices must be set by demand and supply and not by government officials.'
Ren Huiying, a consumer representative from Beijing, reminded officials that the new system should be within the framework of existing laws. 'The new system also should benefit consumers foremost,' he said. 'Consumer rights are of utmost importance and they must be respected at all times.'
Zhou Jun, a consumer representative from Guangdong, said she liked the new system in that it allowed more price flexibility yet also allowed more reasonable pricing movements. 'The current pricing system protects state-owned airlines,' she said.
'We should let the market decide which airline is good and which ones should go out of business.'
The current system follows rules set in 1997, when regulators set a 'one price' policy that allowed for discounts. What resulted was extreme volatility in air ticket pricing, which greatly irritated regulators.
In the past, new policies were almost always modified by officials in secrecy and seldom included representatives from the public.
Tan Xinlu, a senior official of the Civil Aviation Administration of China, reassured consumers that the new system reflected real market demand and supply trends. 'Our price reform working group spent a lot of effort to make sure that consumers were the chief beneficiaries of the new system.'
