January 5, 2016 / 2:51 PM / 5 years ago

Online Chinese travel agency Qunar faces airline revolt

BEIJING, Jan 5 (Reuters) - Chinese online travel agency Qunar Cayman Islands Ltd is facing a revolt by the country’s biggest airlines, several of which have withdrawn their own-branded sales portals from its website in a dispute over passenger charges.

Two smaller Chinese airlines on Tuesday joined China’s big four carriers in suspending such business with Qunar, the country’s number two online travel agency, which has managed to draw a large following by offering deeply discounted air fares.

Rising business travel and a surge in outbound tourism fuelled by an increasingly wealthy middle class in both coastal and inland areas of China is fuelling airline growth.

The number of Chinese leisure travellers going overseas topped 100 million in 2014 and foreign travel is tipped to grow another 10 percent this year.

Tianjin Airlines and Lucky Air, both controlled by HNA Group, joined Air China, China Eastern Airlines , China Southern Airlines, Hainan Airlines and its smaller sister company Beijing Capital Airlines, which have ended so-called flagship store partnerships with Qunar in recent days.

Tianjin Airlines and Lucky Air said in a statement they had received passenger complaints about Qunar charging for returned tickets and how it informs clients of cancelled or delayed flights.

Qunar, which did not respond to requests for comment from Reuters, said in a social media post dated Dec. 31 that the dispute was not about charges but ticket ranking on its website.

“Recently China Southern and Hainan Airlines have insisted that we change the order of ticket display on our website from an order by price to a chronological order. However, we think that displaying tickets by the order of their prices is more suited to the typical booking search habits of our users,” Qunar said in a statement published on social media in China.

Although people looking to buy tickets from one of the airlines involved will no longer find the relevant designated store on Qunar’s website, they will nevertheless still be able to buy tickets from these airlines, Qunar said.

“As a result, we are ceasing our flagship store partnership for the time being but users can continue to purchase China Southern and Hainan Airlines tickets on our site,” it added.

Qunar announced a shake-up of its top management team on Monday following its merger with Ctrip.com International in late 2015.

Shares in Qunar, which are traded on NASDAQ, plunged more than 16 percent on Monday amid a wider fall in Chinese stocks. (Reporting by Fang Yan and Matthew Miller in BEIJING; Editing by Alexander Smith)

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