Domestic Passenger Airline Market In China

2267 words - 9 pages

China, with its extensive territory, large population and rich tourist resources, holds great potential for the development of civil airline market. What I am focusing on this report is the domestic passenger airline services offered in the People's Republic of China. Airline service in general is more like a banded consumer good. We all know that airline companies like BA, KLM, easyjet etc. We can enjoy different in-flight amenities when board on different company's flights. An airline passenger market can be generally divided into two segments-business travellers market and leisure travellers market. Those are the common features for airline market. While the domestic passenger airline industry in China has just begun for about 20 years since it separated from the military sector in 1982. So compared with the other western country's domestic airline market, the stage it is at is very preliminary. Government role is still crucial in this immature market. So the airline passenger market in China is very dynamic, fully reflects its special characteristics at this stage of development and the common features in the passenger airline industry.I would like to introduce the China Passenger market by mainly 3 parts, current market supply and demand conditions, income and price elasticities of airline service, strategy of driving demand of airline travel etc.Table 1The current China passenger airline market share division is like that. Before the restructure of the airline industry in November 2002, there are total 28 passenger airline firms in China owned by the state. China Southern Airline, China Eastern Airline and Air China together dominated the market in terms of share value. However, these dominant players together only accounted for 46.5% of the airline market in 2002. By nature of this industry large scale of operation benefits most, so an industry restructure is eagerly needed. After the industry restructure at the end of year 2002, the three big firms accounted for almost 80% market share in 2003, left only 20% for the relatively small suppliers like Hong Kong-based Cathay Pacific, Dragonair, and Air Macao.First let us look into the supply conditions in the China airline passenger market. There has always been excess supply capacity in this market for about 10 years. The average passenger airline industry load factor in 2001 is merely 53.4%.This situation is largely resulting from the CAAC's (civil aviation administration of China) price floor policy. Before 1997, the CAAC set a minimum price of 0.90 dollar per kilometer per people in China which was above the global average market price of 0.30 dollar per kilometer. A minimum price is set above the market price. Therefore it has a long term effect on the market of excess supply. Though the government tried to buy up some of the excess supply, many suppliers still tempted to break the minimum price rule and offer sale flight tickets at a price less than the official minimum rate. The result...

Find Another Essay On Domestic Passenger Airline market in China

The creation of a functioning market-based economic system in China

1852 words - 7 pages Topic: The creation of a functioning market-based economic system in China is difficult, if not impossible, given current legal arrangements, Critically assess whether, or to what extent, this statement is correct.Since the reform undergone in 1978, China has experienced many changes in its legal arrangements for the socialist market development. The ultimate aim of the reform is to improve the living standards in China.Before the reform, China

The Airline Industry Essay

1551 words - 6 pages 2006 the association expected about a $10 billion loss in 2005. However, a few U.S. airlines are able to compete successfully.Dramatic changes in industry structure have occurred against the backdrop of strongly growing airline activity. Growth in air passenger traffic has outstripped growth in the overall economy. The airline industry is highly responsive to economic cycles. Just as most network, airlines are now expected to turn an operating

Financial Analysis on China Eastern Airline Company

5308 words - 21 pages and other countries, including the US. (Domestic flights account for about 45% of sales.) The company's nearly 100 aircraft (most of which are passenger jets) make about 3,000 flights weekly.According to the door of China has been opened, more business opportunities have been created, China Eastern Airline is aimed to become one of the most famous airline company in the world and keep growth and aimed to provide the best air service to customers

Overview of Alaska Airlines

1281 words - 6 pages Alaska Airlines was founded in Anchorage, Alaska in 1932. It then expanded to 22 aircraft operating within the state by 1934. In the late 1970s, the airline began to expand to the lower Western states and by 1987 it had acquired Horizon Air and Jet America. These acquisitions bolstered Alaska Airline’s North/South route structure and complemented the seasonal passenger travel to Alaska. (Sterling,2008) Today, Alaska Air Group, Inc. (Alaska Air

Analysis for Airline Industry

7701 words - 31 pages service levels and greater flexibility.The acceptance of China to World Trade Organization and Beijing's winning bid for 2008 Olympics is expected to have a beneficial effect on airline industry to Hong Kong. However, loosening regulation of China's airline industry, additional flying routes, stake, merger and alliances increase the competition of Hong Kong airline business.These significant changes in the market environment and fundamental

Industry Overview of the Airline Industry

1562 words - 6 pages competition, and fall in demand due to terrorism acts.Rising fuel costs affect all aspects of the market and just as such affect the airline industry. The Biz Journal reported on July 29th that one of the major reasons sited by Delta Airlines for filing Chapter 11 bankruptcy was the rising cost of fuel (www.BizJournals.com, July 29, 2005). The aggressive competition from both foreign and domestic counterparts could pose as another threat. India

Air Asia

1877 words - 8 pages Fernandes co-founder and director of AirAsia. The airline provides fleet size of 101 which fly to many regional and domestic destinations. They market their brand image with the tag line ‘Now Everyone Can Fly’ with the promising lowest ticket fares in the world. The first low-cost carrier in Southeast Asian region and the first ever with LCC frequent flyer program, BIG. AirAsia tries to shine among their competitors and overcome challenges in the

Star Alliance: strategic issues

2434 words - 10 pages market competition.Deregulation ushered in alliances between many domestic and international carriers designed to increase routes. This "open skies" environment saw a free flow of travelers around the world. However, terrorism, a worldwide recession, and the Gulf war slowed air traffic by 25% (Bartlett, Ghoshal, & Birkinshaw, 2004). The terrorist's attack on September 11, 2004 dealt the airline industry another blow. With increased costs because

Cathay Pacific Airlines

4333 words - 17 pages government and the air services agreements (ASAs) in each nation. In the past governments favoured national flag carrier airline. Governments still gravitate towards protection of national airlines and often support these airlines through economic hardship and downturn. Airline industry is starting to open up. Globally low-cost carriers have started to emerge in the market as they are now able to service domestic routes. Fairs are regulated by the Orient

Thai airways

1303 words - 6 pages . It helps to increase the satisfaction of guest easily. For Cathay Pacific, the luxurious aircraft must be their unique point. Furthermore, they are the center of the airline industry to the China hub, which help to increase their potential customer. Thus, Thai airways nowadays need to come up with good strategy to complete in this industry. SWOT ANALYSIS: One of the main strength of Thai airways is the strong revenue growth. It also has

010101

8927 words - 36 pages sa timbang na 32kg. Ang mga panauhin ay kakailanganing magtanggal ng mga gamit sa bagaheng sobra ang timbang sa 32kg at ilipat ang mga gamit sa ibang check-in bag o sa carry-on bag. Anumang bagahe na sobra sa 32kg ang timbang ay hindi tatangapin bilang check-in baggage. Air Passenger Bill of Rights: http://www.gov.ph/2012/12/10/dotc-dti-joint-administrative-order-no-1-s -2012/ Additional Endorsements/Restrictions CEBU AIR, INC. Airline

Similar Essays

Market Structure, Pricing, Performance And Strategies For The Last Ten Years Of The Malaysian Domestic Airline Industry

1314 words - 5 pages Nationwide Sdn Bhd, Transcoach Sdn bhd and still many buses service firms, taxis firms and railway that provide transportation services in Malaysia. And there are so many corgo services in Malaysia such as Gulfship Agencies Sdn Bhd, Jets Express Services Sdn Bhd, K.C.Dat.Sdn.Bhd, Sebah Cargo Handling Agencies Sdn. Bhd and many more.So if we look at the market structure for domestic airline industry in the transportation industry scope, its in the

The Bond Market In China Essay

2872 words - 12 pages rising at about 30 per cent a year (Financial Times, 2014). The bond market of China is developing in a more market-oriented structure, rather than towards an administrative structure. Nonetheless, investors still have to face barriers to access China’s strong expansion through the bond market, such as the number of restrictions regarding who and how can invest, a lack of knowledge concerning the kinds of bonds existing, and other aspects of the

Communism And The Free Market System In China

1377 words - 6 pages . Currently both countries are competition to reach the number one spot in GDP and china has recently been making it to the number #1 spot. Both countries their on ideas of what is best for the people in both eliminating poverty and promoting jobs domestically, but although both countries have similar goals, the major differences lay in the ways the countries regulate economic policy. Would a free market system prevail in making the people well off, or

An Investigation Into The Market For "Western Music" In China

2978 words - 12 pages AbstractThe survey investigated some areas of the current situation of the western music (western European, north American, and Australian music ,but normally recognized as western music by Chinese )market in China and Chinese customers' behavior with the purpose of giving some advice for companies which want to enter or explore the market.30 Chinese students were asked to complete a questionnaire, which displayed their familiarity of the music