Economy

Markets

Industries

Insights

Reports

Events

Consumer-right groups call for probe into air ticket price hikes

(Xinhua)
Updated: 2009-04-24 19:37

Chinese consumer-right groups and law scholars Friday urged authorities to investigate into a collective price hikes by major airlines, which they suspected to be a violation of the Anti-monopoly Law.

The Beijing Consumers Association, the Beijing Consumer Protection Law Society, the Beijing society on industry and business administration and the civil and commercial laws research center under the Beijing-based Renmin University expressed their concern over the controversial price hikes in a joint statement.

"The pricing mechanism agreed by domestic airliners has led to an average rise of 10 percent in price of air tickets," the statement said.

Related readings:  Price floor to be set for air tickets  AirAsia flies high on a small budget  Airlines slash fares by 60%  China's private airline faces bankruptcy amid huge losses

The pricing system approved by the civil aviation authority Monday allowed airliners to raise ticket price after designating discounts based on the government's benchmark price.

Netizens made an outcry after the pricing was approved. A surfer on sina.com, whose online name is andongyanxiu, wrote: "We are still seeing discounted air tickets, but they are fake."

The netizen raised the example of a flight from Beijing to Shanghai. The full ticket price for the route is 1,130 yuan. Passengers used to get 50 percent off for 565 yuan. With the new pricing system, the price for a 50-percent discount ticket is 679 yuan.

The statement held that the collective pricing behavior breaks fair market competition and infringes consumer rights.

"The price hike may bring profits at the price of consumer rights in the short run. But it will eventually harm the healthy development of the civil aviation industry," the statement said.

The Chinese air market looks promising amid the global market slowdown. Domestic passengers volume increased by 17.9 percent in the first quarter over the same period of last year, according to the Civil Aviation Administration.

The government has injected billions of yuan into carriers and exempted them from a tax on fuel discharges to help them weather the tough economic times.

But major Chinese airline companies all in red in 2008 are seeking for more capital injection from the government.

China Eastern's net losses totaled 13.928 billion yuan in 2008, which accounted for around half of all China's airline losses. Ma Xulun, general manager of China Eastern, confirmed the company's woes on Thursday.

He hoped the government could provide more funding to help the company ride through the plight, as it is endeavoring to cut large losses in 2009, break even in 2010 and make profit in 2011.

Consumers suspected the collective price hikes were made by airline companies to make up for their losses.