Shenzhen Airlines' current rule on 60 percent-discounted tickets does not allow for refunds for cancellations.
The rule is set to be replaced with one that will allow ticket holders to change or cancel tickets at graded charging rates before airplanes' take-off, the airline said in a statement on Tuesday.
Under the new rules, economy class ticket holders who bought their flight at a 60 percent discount will be charged 30 percent of the price if they cancel seven days before departure.
If the ticket holder changes the ticket seven days before departure, 20 percent of the price will be charged.
Consumer complaints on exorbitant cancellation fees for discounted air tickets have made headlines in Chinese media over the years.
In February, a woman in Shenzhen found she had to pay over 9,000 yuan for cancelling tickets she bought at 6,400 yuan, sparking public outcry.
In July, the country's aviation regulator, the Civil Aviation Administration of China, urged airliners and online travel agencies to address the issue, calling for the introduction of graded charging rates.
The CAAC said the requirements will be included in a revised regulation on civil aviation industry set to take effect next year.
Spring Airlines, a Shanghai-based budget carrier, announced in October rules that allow holders of "special-price tickets" - tickets purchased at 60 percent-plus discount - to cancel or change tickets up to two hours before departure.
Under the new rules, the charging fee for canceling a ticket seven days before the departure is 50 percent of the price. The old rules gave a ticket holder no refund for cancellation.
