Search

Abstract: This paper examines the recent developments of China’s aviation polices focusing on airline consolidation, the opening up of the domestic aviation market, and the adoption of more liberal international aviation policy. It then goes onto assess the impacts of the above policies on the industry structure, the performance of major airlines, and the competitiveness of Chinese airlines in international markets. The study shows that the industry became more competitive following the opening up of the domestic aviation market. Although major airlines saw an increase in passenger volume and an improvement in load factors, the falling yield and rising costs make them difficult to grow profitably. Moreover, Chinese airlines largely failed to capitalise on building an international network and the majors were weak in international competition. Strategic use of aviation policy to build a strong and profitable airline industry is still a formidable task lying ahead for policymakers. [Copyright &y& Elsevier]

Abstract: Air transportation in China has experienced tremendous growth and major reforms in the past three decades. While there is a large literature on airline liberalization, publications about China are limited. As China transforms from a centrally planned economy to a market economy, how closely has China followed the practice of liberalizing the airline industry seen in other countries around the world? This paper offers a review of air transportation development in China and compares China’s approach with other countries. In particular, this study examines the impact of the government-led airline consolidation of 2002 upon domestic network structure and competition. [Copyright &y& Elsevier]