(Yicai Global) Nov. 27 -- China will allow airlines to set their own prices on domestic routes with three or more competing carriers, up from the previous five, from Dec. 1, regulators said yesterday.

So far, only operators of 1,328 out of the 4,457 flight paths, not including Hong Kong, Macao and Taiwan, or around 30 percent, are priced according to the market. The new policy will increase this number by 370.

Fares are normally determined by the Civil Aviation Administration of China and the National Development and Reform Commission. They set a guide price which the airlines can reduce, but not exceed.

This is part of a market-oriented reform of the aviation industry, an industry insider told Yicai Global. As the pandemic has drastically reduced demand for air travel, it is not expected to lead to an increase in fares in the short term, he added.

The new policy is likely to affect the pricing of full price tickets on applicable routes, which may drive up prices during peak travel periods, Lin Zhijie, a civil aviation industry insider, told Yicai Global. But for those who decide to travel off-season, their costs will not be affected much since these tickets are already available at a discount.

The weak demand in the civil aviation market means that most airlines are unlikely to immediately impose fare increases, and the reform is not likely to have a big impact on tourists, he added.

Editor: Kim Taylor