China United Airlines says it will completely remove all first class seating from its fleet by the end of the month.
The cost-cutting move is to make the carrier more competitive over the next three to five years, said deputy manager Wu Gang.
Current first class cabin space will be adapted to business class seats.
Passengers who have tickets booked in first-class seats can apply for a full refund, Wu said.
Austerity measures and an anti-corruption crackdown announced by the government have dampened demand for first class seats for government officials and executives of state-run companies.
"Now, the consumption of first-class seats is considered hedonism," said Qi Qi of the China Air Transport Association.
State-run telecom companies such as China Mobile, China Telecom and China Unicom were ordered recently to close down their VIP lounges in airports to cut costs.
"China’s aviation market will see an upsurge of budget airlines and the transformation of China United Airlines is in line with this trend," said Liu Shaoyong, general manager of parent company China Eastern Airlines.
"All we need to do is to follow this ride to embrace a more public-oriented market," Liu said.
