China Southern Airlines, one of China's biggest carriers, lost a lawsuit on April 25 after a court ruled it had failed to notify a customer that his flight might have been overbooked.

The ruling was without precedent in China. Courts have traditionally favored large enterprises and government departments in consumer-initiated lawsuits, even as such disputes have grown increasingly common in recent years.

The passenger, a Beijing resident known only by his surname, Xiao, sued China Southern for not allowing him to board an overbooked flight for which he had bought a ticket.

Xiao had purchased a ticket that had been discounted by 30 percent for flight CZ3112 from Beijing to Guangzhou on July 21, 2006. He paid 1,300 yuan (US$168).

However, when he tried to check-in, he was not allowed to board. Airline staff told him everyone had boarded the flight and that Xiao's ticket had been bumped by overbooking.

Staff told him that overbooking is an international practice, and that airline companies are allowed to sell roughly 3 percent more tickets than seats available.

China Southern then arranged for Xiao to take the next flight, CZ3100, and upgraded him to a first-class seat. The flight was due to leave Beijing at 10:39 pm, two-and-a-half hours later than the original flight.

In response, Xiao accused the company of obscuring the truth, causing him to be delayed at the airport and violating his rights and interests. He decided to sue the company, demanding a public apology and 2,600 yuan in compensation, or double the cost of the ticket.

The People's Court of Chaoyang District in Beijing heard the case on April 24.

"The defendant did not inform the plaintiff that the ticket sold to him was for an overbooked flight. That is cheating, and consequently the company violated the plaintiff's interests," said the man's lawyer.

The defense said overbooking is an internationally accepted practice aimed at hedging against possible losses.

The court ruled that China Southern should pay Xiao 1,300 yuan for failing to inform him that he might not be allowed to fly as planned, though it also said the company had not cheated Xiao.

Overbooking is a fairly new concept in China, and few airlines bother to tell passengers about it.

The court sent a letter to the General Administration of Civil Aviation of China (CAAC) suggesting that it draft regulations on air ticket overbooking.

A CAAC official surnamed Wang told China Daily that the current system lacks rules in practice.