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China relaxes control on domestic fare pricing

China has lifted some controls on domestic airfares, giving airlines greater freedom in how they price tickets on more than 300 routes.

On routes where there are more than five players, fares shall be subject to market forces, says the Civil Aviation Administration of China.

Any fare increase on a given route should also not exceed 10%.

The Chinese regulator says this relaxation of rules will allow fares to be determined by market forces and further develop the country's civil aviation industry.

Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines all saw their shares rise following the announcement, with analysts confident that the liberalisation will drive the sector's earnings.

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