Air Ticket Prices Rise Airlines Deliberately Raise Prices For Subsidies? CAAC Response

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Recently, many netizens reported that the ticket prices of some routes had risen sharply, which caused concern and heated discussion. Some netizens even disclosed that in order to keep the number of flights not exceeding 4500, airlines are eligible for subsidies and will deliberately increase ticket prices and reduce the seating rate** June 1, reportedly, In response to the recent increase in ticket prices, the relevant person in charge of the civil aviation administration responded.

Recently, many netizens have reported that the price of some air tickets has risen. In this regard, the person in charge of the relevant departments and bureaus of the Civil Aviation Administration said that at present, the domestic route fares are mainly market adjusted prices, and the airlines independently determine the specific fares according to the market supply and demand.

Before the implementation of the subsidy policy, due to the serious shortage of effective demand in the air transport market and the serious distortion of the relationship between supply and demand, the average ticket price of domestic routes was far lower than the industry average announced ticket price level**

It is reported that on May 26, the Civil Aviation Administration and the Ministry of Finance jointly issued a subsidy policy for passenger flights. From May 21 to July 20, they will give subsidy policy support to qualified domestic passenger flights. At present, the policy has been implemented normally for more than 10 days.

In response to the netizen's claim that "Airlines raise ticket prices, lower the seating rate, and obtain more subsidies", the Civil Aviation Administration's public data show that since this year, the seating rate of civil aviation has generally been at a low level. The average seating rate from January to April this year was 65.0%, and the seating rate in the first week of the implementation of the subsidy policy was 55.5%, which has not yet reached the 75% level.

There is no basis for the statement that "the seat rate should be controlled below 75% to obtain subsidies"

In addition, the person in charge of the relevant departments and bureaus of the Civil Aviation Administration said that according to the policy, the subsidy is the part of the actual income of the supplementary flights that is not enough to make up for the variable costs such as aviation fuel, aviation material consumption and pilots' hourly fees. Raising ticket prices will increase revenue, reduce losses and reduce the amount of subsidies.

Therefore, in terms of subsidy principle, there is no possibility that airlines can get more subsidies by raising ticket prices.

In addition, there are rumors on the Internet that the subsidy policy will be suspended in the third week (June 4 to June 10).

In this regard, the person in charge of the relevant departments and bureaus of the Civil Aviation Administration said that according to the current subsidy policy, whether the company can enjoy the subsidy depends on how many flights the whole industry flies in a week. If the daily average number of flights in the whole industry exceeds 4500 in a week (maintaining the minimum number of flights for safe operation).

According to the current subsidy conditions, airlines cannot enjoy the subsidy policy, instead of the subsidy policy being suspended, let alone the subsidy policy being gone, this is a dynamically adjusted "minimum guarantee" policy**

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