Recently, a news about Chinese airlines stating that “discounted tickets cannot be lower than 200 yuan” has sparked widespread attention. The discussion of “ticket price limits” has once again triggered debate, underlying the intensifying trend of “low-price” competition in the Chinese civil aviation industry in recent years.
A verified individual in the aviation industry on Weibo claimed that several airlines have been instructed by relevant departments not to sell tickets below 200 yuan (Chinese currency). The relevant departments will closely monitor ticket prices and issue warnings for violations.
In response to this, “The Beijing News” reached out to multiple airlines such as Air China, China Eastern Airlines, China Southern Airlines, Hainan Airlines, Sichuan Airlines, and Lucky Air for verification, and all of them stated that they have not received any related notifications.
However, upon searching for discounted tickets on multiple airline apps, websites, and OTA platforms, it was observed that the base price of discounted tickets rarely goes below 200 yuan. Yet, on some routes offered by airlines like China Xia Airlines, the base price of tickets still remains below 200 yuan.
It has been reported that the attention towards ticket prices stems from the escalating trend of “low-price” competition in the civil aviation industry in recent years. For instance, since the New Year holiday, some popular flight routes have been selling tickets at discounts of up to 70% or even 90%.
Industry insiders suggest that under the current situation of airlines fiercely competing on low prices, there are times when airlines would rather fly at a loss due to the comprehensive consideration of costs and potential profits. However, if ticket prices significantly undercut costs in the long run, it will not be beneficial for ensuring service quality and safety standards.
Chinese civil aviation expert Lin Zhijie mentioned that in reality, ticket prices have always been government-regulated rather than purely determined by the market. Even during peak travel seasons like the Spring Festival, the economy class tickets cannot exceed the full fare price.
Furthermore, an airline employee mentioned that imposing “ticket price limits” during the peak travel season in civil aviation is unnecessary, as there already exists the limit of full fare in the economy class.
Amidst the trend of low-price competition, why do airlines persist in flying even at a loss?
In response to this, senior civil aviation expert Guo Jia explained that airplanes differ from other modes of transportation like cars due to their complex influencing factors. After obtaining flight rights for a route, airlines risk having these rights revoked if they do not operate flights on that route for an extended period. Additionally, it is related to their operational costs.
For an airline, operational costs consist of various aspects, generally categorized as fixed costs and variable costs. Fixed costs include expenses such as aircraft purchase or leasing fees, investments in facilities like hangars, maintenance bases, training centers, as well as maintenance costs for aviation materials. Variable costs encompass expenses like fuel costs, landing fees, crew expenses, catering services, sales expenses, insurance premiums, aviation material reserves, and environmental charges such as carbon emission taxes and noise control expenditures.
Reports indicate that in the current fiercely competitive environment with a serious oversupply, as long as an airline can afford to operate flights at a loss and offers tickets at rock-bottom prices, other airlines are forced to follow suit, plunging the industry into a vortex of price wars.