Beginning yesterday, China's domestic air-fares down 1 percent, while the fuel prices have dropped 20 percent in three months, according to the information from the Civil Aviation Administration of China, the Youth Post reported today.

According to the Planning Commission, the domestic air-fairs are regulated in line with the changes of the aviation fuel prices, and 3 percent of air-fares increase (down) are allowed to make up for the 10 percent increase (down) of the fuel prices. However, according to CAAC, the increase margin of air-fares has an upper-limit of 14 percent now instead of the original 20 percent.

The current domestic fuel price has fallen 20 percent from November 1, 2000, according to CAAC's price office, so the price-cutting margin of air-fares should be around 6 percent. The original air-fare 1040 yuan (US$125) from Beijing to Shanghai should drop at least 50 yuan instead of the only ten-yuan cutting since yesterday.

On November 5 last year, the air-fares of all airline companies only increase 15 percent rather than the allowed margin of 20 percent. So the actual 1 percent cutting now aimed at making up for the loss last time, said CAAC's price office.

The 15 percent of air-fare increase in November last year resulted from the 86 percent increase of the fuel price from 1999 to 2000, while the 20 percent falling of the fuel prices didn't get the corresponding responses, said an insider.

(Eastday.com 02/07/2001)