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Airfare rises may violate the law

CHINESE consumer-right groups and law scholars yesterday urged authorities to investigate a collective price hike by major airlines that they suspect are 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 Renmin University's Civil and Commercial Laws Research Center issued a joint statement expressing their concern over the controversial price increases.

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

The pricing system approved by the civil aviation authority on Monday allowed airlines to raise ticket prices against the government's benchmark price.

Netizens were outraged after the pricing was approved. A surfer on, 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 benchmark price for the route is 1,130 yuan (US$165.57). Passengers used to pay 565 yuan when they got 50 percent off. Now 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 still looks promising in the global economic crisis.

Domestic passengers volume in the first quarter increased 17.9 percent from the same period 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 airlines, who all made losses last year, are seeking further injections of capital from the government.

China Eastern's net losses totaled 13.928 billion yuan last year, which accounted for about 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 crisis as it is endeavors to reduce losses this year, break even next year and make profit in 2011.

Consumers suspect the companies made the collective price hikes to make up for their losses.


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