Chinese authorities have fined a low-cost airline almost USD$20,000 for selling tickets for the equivalent of 13 US cents in a promotion, saying they broke national pricing rules, a newspaper said on Monday.

Spring Airlines, set up last year by travel agent China Spring International, sold more than 400 tickets on a new route between Shanghai and the northern city of Jinan for just 1 yuan (USD$0.13), the Beijing Times said.

But that went against a 2004 rule -- designed to help carriers' bottom lines after a vicious price war -- that the maximum discount an airline can offer is 45 percent off a government-set base price, the report added.

A standard one-way ticket between Shanghai and Jinan costs CNY760 (USD$97), excluding tax and fuel surcharge.

The Jinan government said it would fine Spring Airlines' local travel agent branch CNY150,000 yuan (USD$19,160) as a punishment, though the company denies wrongdoing and will appeal, the newspaper said.

The case underscores the difficulty facing Chinese low-cost airlines, which are trying to model themselves on carriers such as Ireland's Ryanair in bringing cheap no-frills travel to the world's most populous nation.

China's airline industry is dominated by three main state-run carriers, which a clutch of low-cost airlines are trying to compete against.