Competition between aviation and high-speed railway is expected to grow more intense with 101 new passenger air routes on the Chinese mainland, including one between Shenzhen and Xiamen, implementing market-oriented prices.

The lifting of administrative intervention in the aviation industry, which gives airlines more flexibility in pricing, has caused widespread concern that air fares may go up.

The Civil Aviation Administration of China (CAAC), however, dismissed such worries on Tuesday, assuring that air fares will not rise considerably after the adjustment, as airlines still face stiff competition from land transportation.

"High-speed railway and expressways are substitutes for air travel. Therefore, there will not be a big increase in air fares after the adjustment," the CAAC said.

It said consumers will not find air travel costlier as various airlines do offer discounts.

Aviation experts have welcomed the reform, saying the move will boost positive competition between air and land transportation.

"The reform is a boon for both sides and travelers," said Li Hang, an associate professor of the Economic and Management College at Civil Aviation University of China.

"From the perspective of the overall industry, it will promote competition between aviation and high-speed rail travel. For travelers, they will have more options," he said.

Li Xiaojin, another professor from the university, agreed. "The loosening of price controls will lift the attendance rate for airlines and allow consumers more options, achieving maximum consuming benefit."

Among the 101 new passenger air routes, one is from Shenzhen to Xiamen. As air travel on the route has no advantage in time, experts believe that airline companies may reduce their prices in an effort to compete with land transportation operators.

The high-speed railway between Shenzhen and Xiamen came into operation in 2013, providing Shenzhen residents, as well as passengers from Hong Kong, an alternative place to spend their weekends and holidays.

The traveling time between the two cities has now been reduced to less than four hours.

"Generally, air fares on the Shenzhen-Xiamen route will go down after the reform. But, for certain peak holiday periods, they will go up," Li Hang told China Daily.

"Compared with aviation, the advantage of high-speed railway lies in its services rather than pricing," he said. For example, the high-speed railway is more punctual, saving travelers plenty of time.

However, with the increase in people's disposable income, their sensitivity over prices will decrease, Li Hang said.

Although the reform plays an active role in giving aviation an edge in prices, the crucial factor in the long term is not pricing, but service improvement.

"Pricing is just a stage in the battle. The core competitiveness between the two transportation modes lies in services," Li Hang stressed.

sally@chinadailyhk.com

(HK Edition 01/10/2015 page8)