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China Southern Airlines, one of the country's biggest carriers, lost a lawsuit on Wednesday 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 ($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 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 heard the case on Tuesday.

"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.

Generally, airline companies inform passengers when their ticket is in the overbooking category, allowing them to decide whether or not to buy the ticket. China Southern failed to notify Xiao.

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 (CAAC) suggesting that it draft regulations on air ticket overbooking.

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