China’s Airfare Drops to $28 Following Summer Peak

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Airfares in China have dropped significantly following the peak summer travel period, with some new international routes now available at prices as low as CNY200 (approximately USD28), putting pressure on airline profit margins.

In addition to the typical seasonal decline, both Thai Lion Air and Aero K Airlines, a budget carrier from South Korea, have introduced ultra-low-cost flights from Datong in central China to various Asian destinations, supported by government subsidies. Industry insiders reveal that this move is part of a broader strategy to attract more travelers.

Travelers report that tickets for October departures from Datong, Shanxi province, to Bangkok and Seoul can be found for between CNY200 and CNY300. In contrast, similar flights from Shanghai on the same routes tend to cost over CNY500.

Thai Lion Air started offering its direct Datong to Bangkok route late last year, marking Datong Yungang International Airport’s first international service. The airport mainly serves the city famous for the Yungang Grottoes. Aero K launched its direct route from Datong to Seoul last month.

Airfares within China have also declined since the summer travel peak. Data from flight information provider Flight Master indicates that ticket prices on the 20 busiest domestic routes dropped both week-over-week and year-over-year last week.

For example, the average fare between Shanghai Hongqiao International Airport and Shenzhen Bao’an International Airport—China’s busiest air route—was CNY785 last week, representing a 9% decrease from the previous week and an 8% decline from the same period last year.

Some civil aviation companies have ramped up capacity and offered extremely low prices to compete for market share, resulting in inefficient and homogeneous competition. According to a civil aviation official, while the industry has seen growth in scale and revenue, profit margins continue to decline.

During the first half of the year, China’s three major state-owned airlines remained unprofitable. Air China experienced a net loss of CNY1.8 billion (about USD252 million), narrowing by 35% compared to the previous year. China Eastern Airlines reported a loss of CNY1.4 billion, which improved by 48%, while China Southern Airlines posted a loss of CNY1.5 billion, up 25%.