On the heels of its landmark code-sharing agreement with America's United Airlines, Air China recently announced the launch of an electronic ticketing system covering domestic flights from Shanghai, with plans to offer similar services in Guangzhou, Shenzhen, and Chengdu when the upgrade of its nationwide computer system is completed this year.

Air China, one of the country's three largest air groups, first started offering an online service in Beijing at the beginning of July. "Overseas passengers may wait until next year when we offer the service on international routes as we hope for the service to become established on domestic routes first," said Zhu Songyan, marketing manager with Air China.

Air China is only the latest domestic carrier to launch electronic tickets as a means to keep up with their overseas counterparts. Earlier in 2003, China Southern Airlines launched an online booking and payment service to all customers of China UnionPay, the nationwide online payment network which serves the majority of China's bankcard holders.

Shanghai-based China Eastern Airlines also plans to promote its electronic tickets next month. This move towards an electronic service are seen by industry sources as evidence of increasing competition among domestic carriers, although it is clear that it will also enable airlines to lower costs through the removal of agents and, therefore, their commissions. It is feared, however, that the domestic population's unfamiliarity with online payment via bankcards may be an obstacle.

"Online payment is not so popular in China as it's in other countries," said Zhu with Air China. "The promotion of paying online still has a long way to go."