(Yicai) July 2 -- China expects to set a new record high for air passenger traffic this summer, as fierce competition among airlines drives down average ticket prices.

Airlines may handle 150 million passengers this month and next, a 7 percent increase from a year earlier and an all-time high for the summer season, according to a forecast by the Civil Aviation Administration of China. Daily passenger volume could peak at 2.6 million, surpassing the previous record of 2.48 million set during the Chinese New Year holiday on Feb. 3.

Despite the surge in travel demand, airfares remain subdued. For the two months ending Aug. 31, the average price of an economy class ticket is CNY839 (USD117), an annual drop of 1.3 percent and 3.1 percent lower than the same period of 2019, according to data provider Flight Master.

Some airlines have been deploying excess capacity at ultra-low prices to gain market share, resulting in inefficient and homogeneous competition, Song Zhiyong, administrator at the CAAC, said at a recent industry conference. While the market continues to expand, this strategy has led to revenue growth without corresponding increases in profit, he added.

To accommodate growing demand, several carriers are ramping up capacity. Shanghai-based China Eastern Airlines, for instance, will operate an average of 3,200 daily flights this summer, marking a 5 percent increase on last year.

Meanwhile, Juneyao Airlines, also based in Shanghai, plans to operate 24,000 flights this summer, including 4,150 internationally, representing a 4 percent increase.

Rising demand is already evident in ticket bookings. As of June 26, domestic bookings for July had reached 17.9 million, up 5 percent on the previous year. International bookings rose 14 percent to 7.7 million, according to data from Umetrip.com, a flight information website.

Editors: Dou Shicong, Emmi Laine