Sales in High End Airline Tickets Drops as Frugality Policy was Implemented
Local airline companies are suffering from a drop in sales in its first class and business class tickets in the first half of the year as the number of passengers buying these tickets only accounts to about 5 to 8 percent of all the passengers on the plane, but its proportion from revenue in sales usually reach 15 percent.
High end seat sale dropped after the Central Government advocated frugality as of last year. This pushed airlines to report losses of 10 to 20 percent from the high end seats. China Eastern Airlines reported a 1.2 million loss in high end passengers last year which cause their revenue to drop by 1.9 billion yuan. Spring Airline a privately owned company that is known for selling low cost tickets eventually saw an increase in revenues as the frugality policy was implemented since more government officials chose their airline for traveling and has also pushed the company’s other related business revenues to increase by 50 percent compared to last year.
China Southern Airlines was forced to cut their first and business class ticket prices down by 20 percent in all of its 157 domestic lines since February. The Shenzhen branch of the airline is also offering various services in hopes to cope with the loss of high end passengers such as upgrading passengers and working with enterprises and companies. Other airline companies are exploring operating high end economy class seats that meets a passenger’s need for better service at a lower price.
A business expert said that airline companies must be aware with the different types of people that are flying as the number of business and individual travelers are slowly increasing and are becoming the primary customer base. Insiders also said that there is a need for a high end flight service that continue to increase as the economy increase and the airline companies should be improving its services more to cope up the demand of customers.