Hainan Airlines Co Ltd has started selling some of its tickets via an online auction to ensure all travel agencies have equal access to discount fares — previously agencies with good relationships with airlines employees were often able to get better discounts than their rivals, creating friction in the industry.

The company is currently auctioning off group tickets for 16 routes between major cities such as Shanghai, Beijing and Chengdu.

"In the near future, we may auction some tickets online to individual passengers during special periods like the slow or peak seasons," said Xu Fei, a marketing manager with Hainan Airlines. Auctioning tickets to individual passengers would help the company fill more seats during the slow season, as prices would fall, while maximizing profits during peaks seasons, such as Spring Festival, when passengers are willing to pay higher prices than usual.

"It's not the same as some passengers may imagine that there'll be surprisingly low prices," said Xu. "For each auction, we will set a floor price." Floor prices for current auctions to travel agencies are about half of a ticket's normal fare. Selling to individuals online would involve many of the same problems traditional Internet auction sites such as eBay and Eachnet face. "Since it's hard to identify individual bidders online, there will be some malicious bidding, and some people will decide they don't want a ticket after winning the bid," said Xu.

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