The move, which had been flagged by the country's aviation regulator in recent weeks, will alleviate cashflow pressure on China's aviation industry, one of the worst-affected by the epidemic as nations curbed travel fearing contagion and airlines cancelled flights as demand shrivelled.
Data from Cirium showed the number of flights to, from and within China cancelled or removed from schedules totalled 347,414 from Jan. 24 through Feb. 27.
But some capacity has been added back since, according to flight schedules, with mainland carriers restoring some services as business activity recovers and there are fewer reported coronavirus cases daily in China.
For every available seat kilometre, Beijing will award 0.0176 yuan ($0.0025) for routes that are shared by multiple carriers and 0.0528 yuan for routes that are only operated by one carrier, the Civil Aviation Administration of China said in a statement on its website.
For example, British Airways, which has cancelled all its flights to mainland China, would receive about a 50,000 yuan subsidy for each flight from London to Beijing if it sold all the seats, Reuters calculations showed.
The subsidies, which will be effective for flights between Jan. 23 and June 30, would only apply to routes with mainland destinations or departure points, the CAAC said.
On Wednesday, Finnair said it would cancel all its flights to mainland China until April 30.
(Reporting by Stella Qiu in Beijing and Brenda Goh in Shanghai; Editing by Alex Richardson, Kirsten Donovan)