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Chinese government relaxes premium pricing rules, SIA reports profit in 2009/10


China's CAAC and National Development and Reform Commission (NDRC) announced a new pricing policy for First and Business Class domestic air travel on Friday, relaxing central controls from 01-Jun-2010.

Chinese airlines will be able to set prices of the two classes, presently set at 1.5 times and 1.3 times full economy fares, but must file their changes to the CAAC and NDRC 30 days prior to implementation. The move is expected to result in increases in premium fares, as business travel demand has rebounded strongly in recent months.

The policy announcement however did nothing for Mainland airline stocks on Friday. Airline stocks closed lower as wider markets dipped once again on global financial market jitters. China Southern tumbled 5.2%, Air China 4.5% and China Eastern 3.4%.

Elsewhere, Singapore Airlines fell 1.7% as it unveiled a fourth quarter and full-year profit, providing a cautiously optimistic outlook for the year ahead.

Asia Pacific selected airlines daily share price movements (% change): 21-May-2010

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