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Small airline competes with buses and trains by offering monthly ticket for short-haul flights

China Express Airlines has launched a monthly ticket service that allows passengers to fly between Chongqing municipality and Wanzhou district as many times as they like within a month, a promotion designed to grow the market for commuter airlines against strong competition from highways and railways.

Wanzhou, in the northeast part of Chongqing municipality, is about 240 kilometers from the city. It takes three to four hours by bus to travel between the two areas, while a direct flight can shorten the time to about 40 minutes.

Moreover, it costs less to travel by air than by bus if the passenger makes good use of the airline's monthly ticket service.

A single journey by bus costs 111 yuan ($18), while a monthly flight ticket, sold at 590 yuan not including the 50-yuan airport tax entailed with each flight, can be used to fly up to three round trips each week.

A test run of the monthly ticket by China Express Airlines, which is headquartered in Guiyang, Guizhou province, began on March 9, and more than 100 customers bought one in the following two days, according to Zou Zheng, director of the airline's e-commerce department.

"The monthly flight ticket is most popular among those who frequently travel between Chongqing and Wanzhou for work and those students who leave their homes in Wanzhou for colleges in Chongqing," Zou told China National Radio.

The test run and will last until April 30, but it might become a long-term project and be applied to more routes if the market embraces it, Zou said.

"We definitely will not give up our profits and apply the monthly ticket service to all our routes," he said.

"China Express Airlines mainly operates commuter airlines. We launched the service to increase the public's knowledge about commuter airlines and encourage them to have a go at commuter air service, so it is worth losing part of our profits."

The scale of commuter airlines' operations in China is still small, but the potential of the market's growth is big as the country's airport network improves and people's income increases, said Li Lei, an aviation analyst at China Securities.

"However, commuter airlines face strong competition from highways and railways because of the short flying range," Li told National Business Daily.

"Therefore, to attract passengers, commuter airline providers should not only reduce prices but also launch services accurately targeting niche markets for special routes for business and travel, and joint operations of trunk airlines and commuter airlines."

For example, when the Chongqing-Wanzhou high-speed railway opens in 2016, it will take only a bit more than one hour to travel between them, and air travel may lose its time advantage.

China has 16,000 kilometers of high-speed rail in operation, more than 60 percent of the world's total. The fast development of high-speed rail in recent years has brought fierce rivalry to airlines, especially short-haul flights.

For instance, Wuzhou Airport in the Guangxi Zhuang autonomous region canceled flights between Wuzhou and Nanning, the autonomous region's capital, in July, three months after the high-speed rail service between the cities went into operation.

Other airline companies including Hainan Airlines, Shandong Airlines and Shenzhen Airlines had launched monthly ticket services for short-haul flights within a province or an autonomous region but failed to grow them into long-term projects.