Based on the principle of mutual benefit, the General Administration of Civil Aviation of China (CAAC) will authorize more international flights to China this year, even though domestic airlines do not have the capacity to operate all the extra quotas.

The expansion will mainly concentrate on major cities in Europe and North America, while a few major cities in Africa and South America are also on the enlarged list.

Yang Yuanyuan, minister at the CAAC, told an annual aviation industry working conference in Beijing: "We have given too much thought in the past to the relatively poor operational capabilities of domestic airlines and acted slowly in authorizing more quotas."

This conservative policy directly led to some international air routes being poorly served, especially during peak transport seasons. Passengers had to book tickets to European countries several months ahead of traveling, which aroused large-scale complaints.

"We are going to authorize more flights along international air routes this year, even though domestic airlines have no planes to operate the increased quotas," Yang said.

In another development, Yang said domestic airlines would enjoy greater freedom in the near future to set ticket prices.

The CAAC and State pricing regulators will announce a standard ticket price scheme. On that basis, domestic airlines will be able to adjust their ticket prices with greater freedom, according to the season or booking dates.

"We have submitted the draft regulation to the State Council, and it is expected to be available in the first half of the year," Yang said.

However, the supervision of ticket prices will not be loosened under the new ticket policy.

Yang said domestic airlines that sell ticket for less than the average operational cost would still be severely punished.

CAAC statistics showed that Chinese airlines carried 84.25 million passengers last year, up 9 percent over 2001. The whole industry made a net profit of 770 million yuan (US$93 million).

(China Daily January 24, 2003)