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BEIJING (Reuters) - China Southern Airlines Co Ltd (SS:600029) (HK:1055) plans to change the name of its first-class cabin to business class in a bid to reclaim official customers amid Beijing's crackdown on wasteful government spending.
All passengers sitting in the newly named business class will enjoy the same service as first-class customers after the change takes effect on Oct. 26, the carrier said in a statement. The move will include China Southern's narrow-body jets flying domestic routes.
Chinese air carriers have been hit hard by the government's anti-corruption campaign, which has generated a sharp decline in business and first-class travel. China Eastern Airlines (SS:600115) last year alone lost 1 million premier clients, or 1.1 billion yuan (107.81 million pounds) in revenue, according to a report posted on the eastday.com news website in February.
China Southern executives couldn't be reached for comment. A ticket agent said the carrier currently offers first class, premium economy and economy seats for most domestic routes. It is unclear whether first-class fares will be cut after the name change.
The initiative, which has not been matched by Air China (SS:601111), China Eastern, or Hainan Airlines Co (SS:600221), has spurred heated debate on WeChat, a popular mobile messaging app.
Some expect the name-change to bolster China Southern's passenger load capacity while others say the move is the airline "returning to the reality".
For its part, China Southern said in its statement the name change is "to satisfy market demand".
Chinese President Xi Jinping has made cutting back on extravagance and waste a key theme of his administration, seeking to assuage anger at corruption and restore faith in the party.
Last year, China banned officials from holding extravagant galas linked to official meetings, which has hurt the image of the government.
Government employees also have been ordered to fly domestic carriers as much as possible when travelling abroad.
If domestic carriers do not provide a direct international service, officials should fly on a domestic carrier to a neighbouring country and then transfer to a foreign carrier that can take them to the destination country, the rules state.
The corruption crackdown has helped to sink airline earnings, which also have been hit by this year by a weakening Chinese currency.
Air China had warned about an up to 65 percent fall of its first-half earnings. China Southern said it could post a big loss.
(Reporting by Fang Yan and Matthew Miller in BEIJING; Editing by Matt Driskill)