Discounts offered to consumers are likely to double, with the former 20 percent limit being raised to 40 percent.

These price reductions will be determined by seasonal factors and the dates when the tickets were booked.

For example, an air ticket from Shanghai to Shenzhen with a face value of 1,240 yuan (US$149) could be sold for 744 yuan (US$89) under the new policy instead of 992 yuan (US$120) before.

The sources, who declined to be named, said the change could be implemented when the annual transport peak finishes at the end of February.

They said: "Domestic airlines will have the right to decide the discount according to their market strategies under the new policy - as long as they do not break the 60 percent threshold."

The ticket discount issue has dogged China's aviation industry for years. The General Administration of Civil Aviation of China (CAAC) has long regarded discounting as a major reason for the industry's poor performance.

The CAAC stopped "cut-throat" discount rivalry in 1999, and has maintained the ban on reductions of more than 20 percent.

Industry analysts suggested the CAAC began considering loosening price controls late last year when nine major domestic airlines merged into three aviation groups.

They said the CAAC had collected broad opinions from players within the industry over the "market-orientated" price policy, and decided a "partly opened price policy" best suited the conditions of China's developing aviation industry.

Domestic airlines have lacked patience over the ban even though the CAAC repeatedly dished out harsh punishment to violators. Discounted air tickets could be found nationally - even during the crowded Spring Festival transport peak.

An air ticket from Shanghai to Urumqi, capital of the Xinjiang Uygur Autonomous Region, could be purchased for as low as 55 percent of its face value. Tickets from Beijing to Shanghai - the golden air route in China - were similarly discounted, the Shanghai Morning Post reported.

Industry analysts said discounted tickets are expected to be available after the transport peak ends, when most airlines report spare passenger capacity.

Official statistics reveal that 8.7 million people are expected to travel by air during the 40-day transport peak, and most airlines are operating additional flights to meet demand.

(China Daily January 22, 2003)