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This paper examines the price dispersion among China's "Big Three", namely, Air China, China Eastern and China Southern in the presence of high-speed rail (HSR). It has been found that HSR is positively and significantly associated with airline price dispersion on the long-haul routes, which may suggest that the presence of HSR can facilitate airline cooperation in setting prices and outputs, thereby leading to greater price dispersion. However, on the short-haul routes where HSR is highly substitutable, the HSR competition effect dominates, and smaller price dispersion is observed. All the market structure and competition variables included in this study support the conclusion that price dispersion is greater in more concentrated and more densely travelled markets. The contribution of airline cost to price dispersion is limited. • This paper examines the price dispersion among Chinese main carriers in the presence of high-speed rail (HSR). • The presence of HSR is positively and significantly associated with airline price dispersion. • Price dispersion is greater in more concentrated and more densely travelled markets. • The contribution of airline cost to price dispersion is limited. [ABSTRACT FROM AUTHOR]

When firms meet in more than one market, it is generally regarded that the possibility of collusion will increase because of mutual interdependence (or mutual forbearance). Mutual forbearance is tacit collusion that directly results from familiarity and deterrence. This paper examines the effect of multimarket contact on airline prices in the Chinese domestic airline market where private and low-cost carriers have been thriving and high-speed rail services growing quickly in the last few years. We find strong evidence supporting the mutual forbearance hypothesis in high revenue markets. We also find that the collusive effect due to increasing multimarket contact is insignificant within the same airline group, whereas multimarket contact between airlines in different airline groups triggers higher airfares. [ABSTRACT FROM AUTHOR]

• We examine whether domestic mergers can improve airlines' competitiveness in the international market. • Domestic airline mergers can bring both "synergy" and "scale" effects to prompt the merged airline's international competitiveness. • We use the merger of China Eastern and Shanghai Airlines as a quasi-natural experiment. • The empirical estimations confirmed the existence of both synergy and scale effects. This paper conducts both analytical modeling and empirical analyses to examine whether domestic mergers can improve airlines' competitiveness in the international market. We first develop a stylized industrial organization (IO) model to specify the underlying economic mechanisms. The analytical results suggest that a domestic airline merger can bring both "synergy" and "scale" effects to promote the merged airline's international competitiveness, reflected by an increasing route-level market share. The synergy effect comes from a better-coordinated hub functioning to serve international transfer passengers, while the scale effect is from the increased operational efficiency due to the economies of scale on both domestic and international markets after the merger. We then perform difference-in-differences (DID) estimations using the merger of China Eastern and Shanghai Airlines as a quasi-natural experiment. The empirical estimations support our analytical predictions and confirm the existence of both synergy and scale effects. Our analyses and findings call for a more careful and comprehensive government evaluation of domestic airline mergers, as the welfare gain from the international market could be sizable and should also be taken into consideration. [ABSTRACT FROM AUTHOR]

The US and Europe have long experienced the expansion of low-cost carriers (LCCs) in the aftermath of extensive aviation liberalisation offering free access to the market for US and European airlines, respectively. More recently, following the opening of the progressive aviation market, China has also emerged as a country that welcomed LCCs to some extent, but has not subscribed to full liberalisation. In this context, our paper compares China's largest LCC, Spring Airlines, to the largest European (Ryanair and EasyJet) and US (Southwest and JetBlue) low-cost airlines. Comparisons in this context include volumes supplied, spatial coverage, network geography and financial results. This comparative study found that Spring Airlines is still a small/emerging LCC compared to the European and US giants and in terms of China's potential market. This is notably due to the lack of whole free access to the market and trunk routes that are still protected to some extent in favour of the Big Three in China. However, Spring uses its production means in an efficient way and generates good financial results, especially compared to those of China's Big Three airlines. Finally, Spring appears to be a composite case rather than a duplicate of a reference LCC. • Spring Airlines does not have the same freedoms that exist in fully liberalised markets • Spring Airlines is the largest Chinese low-cost airline but still smaller than its EU and US cousins • Spring's network is a composite case instead of a simple duplicate of leading EU or US low-cost airlines • Spring's network is not as compact and dense as the leading EU or US low cost airlines • Spring efficiently uses its production means and shows better financial results than China's Big Three airlines [ABSTRACT FROM AUTHOR]

Abstract This paper assesses air connectivity between China and Australia for the period 2005–16 using a Connectivity Utility Model. Our direct connectivity measure shows that as a gateway city, Sydney continues to play a key role in facilitating the movements of people and goods between China and Australia. Guangzhou has become the city best connected with Australia since 2011 as measured by direct connectivity. When indirect connections are considered, the largest increases in overall connectivity from 2005 to 2016 can be observed among Australia's major capital cities, particularly Sydney, Melbourne and Brisbane. Chinese carriers are the key drivers behind the increases. There have been rises and falls for airports serving as a hub between China and Australia. Guangzhou has forged its strong status as a transfer hub between Australia and China thanks to the quick expansion of China Southern. The gaps between Guangzhou and other transfer hubs measured by hub connectivity have widened since 2010. Highlights • Air connectivity between China and Australia for the period 2005–2016 is assessed. • Chinese airlines makes a major contribution to the two countries' air connectivity. • Guangzhou has forged its strong status as an emerging transfer hub between Australia and China. • The development of other transfer hubs is assessed and discussed. [ABSTRACT FROM AUTHOR]

The High-speed Railway (HSR) network in China is the largest in the world, competing intensively with airlines for inter-city travel. Panel data from 2007 to 2013 for 138 routes with HSR-air competition were used to identify the ex-post impacts of the entry of HSR services, the duration of operating HSR services since entry, and the specific impacts of HSR transportation variables such as travel time, frequency, and ticket fares on air passenger flows in China. The findings show that the entry of new HSR services in general leads to a 27% reduction in air travel demand. After two years of operating HSR services, however, the negative impact of HSR services on air passenger flows tends to further increase. The variations of the frequency in the temporal dimension and the travel time in the spatial dimension significantly affect air passenger flows. Neither in the temporal nor spatial dimensions are HSR fares strongly related to air passenger flows in China, due to the government regulation of HSR ticket prices during the period of analysis. The impacts of different transportation variables found in this paper are valuable to consider by operational HSR companies in terms of scheduling and planning of new routes to increase their competitiveness relative to airlines. [ABSTRACT FROM AUTHOR]

China’s air transportation has experienced rapid growth and major reforms in the past three decades, some of which have been partially successful and are still ongoing today. The paper aims to analyze China’s air deregulation experience over the last two decades and its impact on airline competition from a geographical perspective. After the establishment of the “Big Three” in 2002, the paper reveals that there has been a trade-off between the extent of deregulation and airline competition in China because the central government has tended to strengthen the “Big Three” rather than totally open the market to private and locally owned airlines. The paper uses each airline group as the basic unit of analysis and reveals that (1) the air market has been more concentrated in the “Big Three” as a result of the process of air deregulation; (2) airline competition in over two thirds of the airports and one half of the routes has increased in the last 18 years, but the core airports and trunk routes are chiefly dominated by the “Big Three”. The peripheral airports and thin routes have been operated by private and locally owned airlines; and (3) regionally, airline competition has occurred in most airports of the eastern region, and it is more intense than in the central and western regions. But even here, competition in the eastern region has however decreased in 1994–2012. The three main contributions of the paper are: (1) the use of two measures of competition in the airline market; (2) the analysis of the historical evolution of competition; and (3) an understanding the role of the geography of competition in the Chinese airline market. [ABSTRACT FROM AUTHOR]

Most of existing studies on vulnerability analysis of multiple infrastructure systems mainly focus on negative effects of interdependencies, which mean that failures in one system can propagate to other systems and aggravate the initial damage. In reality, there also exist positive effects of interdependencies, which are shown in complementary systems and mean that if one system fails another system can provide alternative services to satisfy customers׳ demands. Different types of transportation systems in a city or country are typical complementary systems. Taking railway and airline systems in China as an example, this paper proposes a network-based approach to model the vulnerability of complementary transportation systems, and based on this model, this paper further introduces a dynamic complementary strength metric, which can help decision makers design or select better complementary topologies from the vulnerability perspective. Also, based on a simple genetic algorithm, this paper analyzes whether critical components for single systems are still important when taking two systems as a whole for analysis. Results show that a protection strategy of hardening a few critical components is also good strategy for the combined system. In addition, the findings and several assumptions are further discussed to close the gap between theory and practice. [ABSTRACT FROM AUTHOR]

China, the world’s largest CO 2 emitter, is continuing its long-term strategy to use transportation investments as a tool for development. With the expectation that transportation will contribute 30–40% of the total CO 2 emissions in China in the near future, there is an imminent need to identify how the development of different transportation modes may have different long-term effects on CO 2 emissions. Using time series data over the period of 1985–2013, this paper applies the combined autoregressive distributed lag (ARDL) and vector error correction model (VECM) approach to identify short- and long-run causal relationships between CO 2 emissions and mode-specific transportation development, including railway, road, airline, and inland waterway. We find that China’s domestic expansions of road, airline, and waterway infrastructure lead to long-run increases in CO 2 emissions. Among them, waterway has the strongest positive impact on CO 2 emissions, followed by road. Despite a short-run, positive impact on CO 2 emissions, railway expansion leads to long-run decreases in CO 2 emissions. The results are especially encouraging for the central government of China given its long-standing and on-going efforts to expand railway infrastructure at the national level. Looking forward, it is recommended that China continues its national investments in railway infrastructure to achieve both environment and economy goals. [ABSTRACT FROM AUTHOR]

Abstract: Political rivals for six decades, Taiwan and China, began regular non-stop passenger flights on July 4, 2008. This paper aims to clarify the implications of the Cross-Strait Air Transport Agreement reached by both countries. It offers a review of air transport development in Taiwan and China and compares their approaches with other countries. In particular, this paper discusses Taiwanese and Chinese perspectives on the opening of direct flights. It goes onto analyse the probable effects of the direct flights and identifies the likely winners and losers. It concludes that strengthening air links between the two countries did reduce travel time considerably for passengers and the resulting growth in business will help cushion the effects of the industry’s current economic downturn. [Copyright &y& Elsevier]

This paper encapsulates the Chinese Airline Network (CAN) into multi-layer infrastructures via the “ k -core decomposition” method. The network is divided into three layers: Core layer, containing airports of provincial capital cities, is densely connected and sustains most flight flow; Bridge layer, consisting of airports in Tier 2 and Tier 3 cities, mainly connects two other layers; and Periphery layer, comprising airports of remote areas, sustains little flight flow. Moreover, it is unveiled that CAN stays the most robust when low-degree nodes or high flight flow links are removed, which is similar to the Worldwide Airline Network (WAN), albeit less redundant. [ABSTRACT FROM AUTHOR]

This paper examines China's considerations in reaching the 2004 and 2007 Air Service Agreement Protocols with the United States (US) and the impacts of such policy on the China–US market from the perspective of China. Analysis shows that the 2004 and 2007 protocols have profound impacts on the China–US market. The two protocols have been associated with phenomenal traffic growth and intensified competition. Passengers also benefit from much more choice in terms of both airlines and routing. Over time, Chinese carriers' operating performance and financial performance have gradually improved after the liberalization expressed in the protocols. However, the industry's hub-building initiatives are still seriously challenged by competing hubs in Seoul and Tokyo which have diverted substantial number of passengers moving between the China and US markets. Such issues have to be addressed in order to create a win–win outcome for both countries. [ABSTRACT FROM AUTHOR]

Rapid economic development in China have resulted in the booming demand for comfortable and fast travel mode, and promoted the rapid development of aviation industry in recent years. As an important source of greenhouse gas emissions, airlines' operational efficiency and environmental issues have been widely concerned in achieving the goal of cleaner production of aviation industry. Due to the limitations of traditional DEA approach, which known as a black box, the specific reasons for the inefficiency of airlines cannot be explored. This paper contributed to current literature by introducing the two-stage undesirable Network Slack-Based Measure (NSBM) approach to explore Chinese airlines' multi-stage efficiency: production stage and profit stage, and try to open the black boxes and further explore the characteristics and driving forces of the operational performance in China's aviation industry. Meanwhile, this paper incorporates CO 2 emissions into the calculation by combining the undesirable Slack-Based Measure (SBM) approach and measure the energy efficiency and CO 2 emission efficiency to evaluate their environmental performance on the basis of the two-stage framework. The empirical results on nine listed Chinese airlines from 2013 to 2018 showed that all airlines perform better in earning economic profits from carrying capacity, while the low production efficiency in converting production factors into carrying capacity limits the operational efficiency of Chinese airlines. The energy efficiency of Chinese airlines ranks in line with CO 2 emission efficiency, while the economic and environmental performance of low-cost airlines remain the best. Further discussion indicated that smaller private airlines tend to achieved better economic and environmental performance through low-cost operations, while the top three airlines in market share need further improvement in operational efficiency and environmental performance. The former should pay attention to the upgrading of flights to ensure a certain market share while maintaining its low-cost operation mode, and the latter needs to improve its management and cost control level to achieve clean development. Image 1 • Total efficiency of China's aviation industry is decomposed into production and profit efficiency. • A two-stage undesirable SBM-NDEA model is employed to open the black box. • The main reason for the inefficiency of China's aviation industry is the low production efficiency. • The low-cost airlines remain the best in economic and environmental performance. [ABSTRACT FROM AUTHOR]

While the issue of civil aviation safety has attracted serious public concern, notably few studies have investigated civil aviation safety efficiency. In this paper, a definition of civil aviation safety efficiency is proposed for the first time. Inputs to the proposed civil aviation safety efficiency model are labor, capital, fund and technology. The outputs are the percent of the passenger turnover volume without accidents or incidents to the total passenger turnover volume and Net profit rate. Data Envelopment Analysis (DEA) and Malmquist index are used to calculate the civil aviation safety efficiency of ten Chinese airline companies from 2008 to 2012, and the Panel Regression Model is used to identify the important influencing factors of civil aviation safety efficiency. The results indicate that technology development is not the most important factor affecting the civil aviation safety efficiency of Chinese airlines. Instead, the most important factor is investments in training and developing aviation security staff and airline pilots. The research conclusions could provide guidance for decision makers on civil aviation safety. [ABSTRACT FROM AUTHOR]

This paper examines the key factors that determine business traveler loyalty toward full-service airlines in China. Based on literature review and panel interview, ten airline attributes under three categories were derived: (a) operational factors: safety, punctuality, and aircraft; (b) competitive factors: frequency of flights, schedule, frequent flyer program, ticket price, and reputation; and (c) attractive factors: in flight food & drinks and in flight staff service. We surveyed 2000 Chinese business travelers on domestic flights, obtaining 462 usable questionnaires. Hierarchical regression analysis reveals that reputation, in-flight service, frequent flyer program, and aircraft have the greatest influence in driving airline loyalty. [ABSTRACT FROM AUTHOR]

• This paper compares the price effects of two influential airline mergers taking place in China. • We offer the first comparative analysis of two different types of airline mergers in the Chinese airline market. • A complementary merger could also confer an increase in market power. • The negative impact of high-speed rail on fares gradually weakened after the mergers. This paper compares the price effects of two influential airline mergers taking place in China in 2010. We offer the first comparative analysis of two different types of airline mergers in the Chinese airline market: a parallel merger and a complementary merger. With a difference-in-differences approach, we found that the two types of mergers resulted in similar pricing patterns for the airlines involved in the mergers, suggesting that complementary mergers could also confer an increase in market power. It has been found that the negative impact of high-speed rail on fares gradually weakened after the mergers. [ABSTRACT FROM AUTHOR]

Abstract: In recent times, some airlines have entered into a partial alliance with their rival airlines in the common market. In this paper, we explore how much this so-called co-opetition alliance benefits participating airlines by improving their overbooking policies. We aimed to determine the optimal overbooking policies when two competing airlines operate in such an alliance and explore whether and how their partial cooperation through such an alliance agreement with each other on two parallel flights enhances revenue and service quality as well as reduces fuel cost. We show rigorously that this type of partial cooperation increases expected profits and service levels. An empirical study was conducted on actual cases in the China air travel market for routes between Hong Kong and Beijing to illustrate the win–win effect of this type of alliance application. [Copyright &y& Elsevier]

Abstract: This paper presents an effective approach based on combining VIKOR, GRA, and interval-valued fuzzy sets to evaluate service quality of Chinese cross-strait passenger airlines via customer surveys. The proposed approach can enable decision-makers to understand the gaps between alternatives and aspired levels. An empirical study is used to establish a complete service quality evaluation framework for reducing the gaps to achieve the aspired level. Based on the gaps in priorities, it can help an airline to identify its own strengths and weaknesses in specific areas of passenger service to further improve service quality. [Copyright &y& Elsevier]

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]