Air China, China Eastern the latest carriers to sever ties with online travel site Qunar citing terrible customer service

Customers reportedly complained of subsequently changed terms and conditions, unfairly heavy penalties, lack of notifications

PUBLISHED : Tuesday, 05 January, 2016, 5:03pm
UPDATED : Tuesday, 05 January, 2016, 5:10pm

China’s state-owned airlines Air China and China Eastern have suspended tickets sales from online travel agency Qunar due to complaints from passengers, the two carriers announced this week.

Qunar is the second-largest online travel agency platform in China after Ctrip. Apart from flights, it offers tours and accommodation bookings worldwide and mainly targets Chinese customers.

But customers who reserved tickets on the two aforementioned airlines reportedly said Qunar subsequently altered the terms and conditions of the deal. Others complained of either being overcharged on ticket prices or too heavily penalised for cancellations. A third group said they were not notified of changes to their flight itineraries or dates.

“In order to protect customers’ rights and strictly regulate market order, our company has decided to suspend our business co-operation with Qunar with immediate effect and shut down our flagship store on Qunar,” China Eastern said on Monday.

Air China released a similarly worded statement on the same day.

Three more Chinese airlines - China Southern, Hainan Airlines and Capital Airlines - also ended their co-operation with the company at the end of last month over similar concerns.

The travel site struck back by claiming the partnerships dissolved “as a result of disagreements over ticket display order”. It said the airlines wanted it to display all available tickets by putting the earliest flights first.

“But we think that displaying tickets according to price is more suitable to the typical booking search habits of users,” Qunar responded last week.

Chinese airlines have been scaling back the size of the commissions they pay travel agents in recent years to tighten control over ticket prices and encourage customers to book directly on their websites, which increases their chances of collecting extra fees for options like extra legroom.

Air China dropped its free from 3 per cent to 2 per cent in June 2014 and China Southern, Hainan Airlines and China Eastern soon followed suit.

Most later reduced their commissions to 1 per cent, with China Southern waiving its commission for travel agents altogether last June.

This sparked concern over the impact such moves would have on the online travel industry. Smaller online travel agencies are expected to take the biggest hit, according to industry observers.

Meanwhile, Qunar engaged in a share swap last October with Ctrip owner Baidu - China’s No 1 online search player - worth an estimated US$3.4 billion that left Ctrip holding a 45 per cent stake in its rival.

China’s online travel market reached 122.23 billion RMB (US$19.07 billion) in the third quarter of 2015, according to market research company iResearch, up 46 per cent on-year.

Moreover, Nasdaq-listed Qunar said in November it was expecting its revenue to more than double in that quarter from a year earlier. The company raised US$500 million in a funding round last June to improve its mobile-based operations, with the biggest investor being technology-focused American private equity firm Silver Lake.