(Yicai Global) Jan. 9 -- China's regulators have paved the way for airlines to introduce higher airfares under a new price liberalization policy.  Regulators have unveiled a new round of civil aviation fare reform. The airfare for the busiest routes involving the first-tier cities may go up 50 percent under the new policy, said online media outlet the Paper.

The Notice on Further Reform on Domestic Air Transport Prices, a document issued by the Civil Aviation Administration of China and the National Development and Reform Commission, gives airlines more freedom to set prices on the domestic air routes. The airlines will be able to set their own prices on domestic routes over which at least five carriers compete, says the Notice.

Each airline should be allowed a 15 percent increase in the number of air routes, with planned price rises in each travel season. Price increases of no more than 10 percent would be allowed for a single air route in each travel season, and the airlines should be operating on at least 10 air routes.

The new ruling applies to some 306 domestic flight routes, including the routes between Beijing, Shanghai, Guangzhou, Shenzhen and other major cities and provincial capitals.

With the tight control on flight numbers and the liberalization of prices, the airfares would definitely increase, industry expert Lin Zhijie told the national radio, CNR. The airfares between Beijing and Shanghai or Guangzhou would rise more than the others due to limited number of services.

The price liberalization on key routes will bring incentives to airlines to maintain the momentum for price rises, said a transport research team at TF Securities. After studying possible airfare increases following price liberalization, the team found that the airfares may go up 50 percent for the air routes between the first-tier cities. The top 20 domestic air routes are expected to see a continuous price rise, it warned.