Chinese budget airline withdraws appeal over proposed fines on one-yuan tickets

Spring Airlines, a Chinese budget airline based in Shanghai, has withdrawn an appeal to the price watchdog in east China's Shandong Province for a public hearing over a proposed fine for selling allegedly below-cost tickets.

Spokesman Zhang Lei said on Wednesday the airline made the decision after talks with the Jinan Price Bureau, and an agreement to review the proposed fine.

"Our withdrawal of the appeal for a public hearing does not mean the price bureau has revoked the proposed fine. The bureau will make a final decision after further investigation and discussion," Zhang said.

The bureau fined Spring Airlines 150,000 yuan (19,180 U.S. dollars) for selling more than 400 one-yuan tickets late November for one yuan each.

Sun Jianmin, director of the Jinan Price Bureau, said the proposed fine was not the final penalty and they would consult with other departments, including the civil aviation department, for a final conclusion.

Spring Airlines and its subsidiary, Jinan Spring Holiday Travel Agency, put 400 one-yuan tickets on the market on Nov. 28. They sold out in three days.

The tickets were for flights between Jinan and Shanghai from Nov. 30 to Dec. 10 and accounted for 10 percent of all the seats.

The Jinan price bureau later informed Jinan Spring Holiday Travel Agency that it had been fined for 150,000 yuan for selling tickets for as little as one yuan (13 U.S. cents).

The bureau said in a notice that Spring Airlines had breached the regulations on discounted air tickets promulgated by the National Development and Reform Commission and the General Administration of Civil Aviation of China (CAAC).

But the China East Air Traffic Management Bureau has not commented on whether the one-yuan air tickets violated the regulation.

The regulation stipulates that airlines can only offer discounts of up to 45 percent on standard air tickets.

The benchmark price for a regular one-way ticket on the Jinan-Shanghai route is 610 yuan, and the bottom line should be 275 yuan. The one-yuan ticket is clearly lower than the bottom line, some people have argued.

But the travel agency defended its parent company by saying the regulation did not specify whether it referred to every ticket sold or the total number of tickets sold by the airline.

Zhang Lei said they sold cheap tickets to attract passengers because the flights are arranged close to midnight, a time most people would be reluctant to travel.

Zhang said the sale of one-yuan tickets was not a long-term practice, but a move to promote the Jinan-Shanghai flight.

"I think the one-yuan ticket is fair and reasonable because it enables more people to travel by air and it helps make full use of the seats," Zhang said.

Spring Airlines launched its maiden flight in July last year, becoming the first airline to announce a budget travel strategy in China.

Source: Xinhua