China Southern eliminating premium service amid campaign against corruption

China Southern Airlines Co Ltd will drop first-class service on narrow-body domestic routes as of Oct 26, a response to the government's campaign against wasteful official spending as well as a reflection of low load factors for these high-priced seats, analysts said.

Those cabins will be designated as business class.

The carrier, which has the nation's largest fleet, told China Daily that notification has been sent to all of its ticket agents and passengers who have bought first-class seats. These passengers can change their reservations or get a partial refund, if they prefer.

The Ministry of Finance announced in early 2014 that officials below the ministerial level may not fly first class when traveling on government business.

"The name change supports the government's regulations," said Li Lei, an analyst at China Minzu Securities Co Ltd, but the low load factor in first class was probably the main reason for the change.

Most domestic carriers have been losing money in their first-class and even business-class sections this year, while the situation has been improving in economy class, Li added.

However, China Southern Airlines attributed the name change to an equipment issue.

"China's entire civil aviation industry faces the same problem," said an official from the public relations department of China Southern.

Although there is no uniform standard for first class, the common standard for the global aviation industry involves fully reclining seats and individual entertainment systems, he said. Most narrow-body aircraft in service in China do not meet these standards.

"We need to keep in step with the global industry. That's the only reason for the name change," he said.

But whether fares rise or fall depends on the route, the official said.

Other major domestic carriers, including Air China Ltd and Hainan Airlines Co Ltd, said they do not have any plans to eliminate first-class service.

Some experts said that all the carriers should probably follow China Southern's example.

The move "is in line with the reality, as the current first-class cabins on domestic routes cannot offer first-class service," said Ji Qi, a committee member of the China Air Transport Association.

Some domestic airlines had only offered first-class service to make more money or even just improve their image, Ji said.

"The change is just a return" to reality, he said.

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