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Hainan Airlines Co Ltd, the country's fourth-largest air carrier, has started selling some of its tickets through an online auction to ensure all travel agencies have equal access to discount fares.

In the past, 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.

However, the market must mature before that is possible, Xu said.

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.

But consumers shouldn't expect to find any ridiculously cheap fares online.

"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.

"Hainan Airlines is always selling tickets with prices lower than taverage on the market and the ticket auction is only a direct and easy way for the company to compete against China's three largest air carriers," said an industry insider surnamed Zhai who works for one of the country's three major carriers.

Hainan Airlines often sells tickets about 5 percent cheaper than its rivals, and sometimes it triggers price wars with deeply-discounted airfares, according to those in the industry.

For instance, after the SARS outbreak in June, the company sold tickets on its Shanghai-Beijing route for 90 percent off, forcing other carriers to drop their prices.

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