China Eastern Airlines says business bad in 2 mths to Feb

SHANGHAI (AFX-ASIA) - China Eastern Airlines Co Ltd's business in the two months to February was "not good at all", company secretary Song Danyang said.	    Song made the comments when asked about a recent report in the Nanfang Weekend saying China's three largest airlines made large losses during the two months, with one incurring a loss of up to 500 mln yuan.	    He said he could not comment on the size of losses made during the period, "but I can confirm that business in the two months was not good at all".	    While the Spring Festival Holiday, which falls in January or February each year, is generally peak time for travelling, business was only strong on certain routes for a short space of time during the holiday this year, he said, noting that the company's passenger load during the full two months was very low.	    He said he believes this weakening in ticket sales resulted from a decision by the Civil Aviation Administration of China, at the end of last year, to require airlines to impose a 15-pct surcharge on air ticket prices in order to take account of high fuel costs.	    This surcharge deterred price-sensitive customers, and made it more difficult for the airlines to compete for business with trains and buses.	    In general, about 70 pct of air passengers use government or company money to buy their tickets, and so are not too sensitive to price changes, but other travellers who buy tickets with their own money are highly sensitive to price, he said.	    He said he believes the CAAC's recent decision to allow ticket price discounts of up to 40 pct on seven key domestic air routes must be related to the weak performance of airlines during the early part of this year.	    "It's too early to say whether the same discount policy will be applied to all routes, after a period of experimentation, but I can say that there is bound to be a change of policy at the end of March or the beginning of April," he said.	    Song noted that the airlines each signed agreements last year to take part in a ticket revenue sharing system on about 100 domestic routes.	    The agreements are effective for one year from April 1 2000, and so will expire at the end of this month, he said.	    "I don't believe this policy will be extended beyond the end of March, so there is bound to be some kind of new policy to replace it," he said. 

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