China's airline industry deregulation: assessing the impact on the operational performance of dominant carriers

Research output: Contribution to journalArticle

Abstract

This paper analyses the operational efficiency of the big three Chinese airline carriers post deregulation from the managerial perspective, using empirical data and by means of parametric methods in order to further understand the potential this market has for its dominant carriers. The analysis uses financial and operational data for the three dominant carriers in the Chinese airline industry and estimates the effect deregulation has had over a period from 19942012 to the dominant carriers. This analysis validates that the Chinese airline industry operational efficiency as measured by revenue and cash flow generation ability is positively associated with the load factor within a period that includes deregulatory initiatives. This finding highlights that the airlines have reacted positively post deregulation and have reasonably coped with competitive forces. Thus a further airline industry convergence is expected, on a global scale. This convergence will positively affect the Chinese airline industry, which in turn will benefit the passengers in terms of technology innovation, prices and welfare status.
Original languageEnglish
Pages (from-to)182-198
Number of pages17
JournalInternational Journal of Aviation Management
Volume4
Issue number3
Early online date21 Mar 2019
DOIs
Publication statusE-pub ahead of print - 21 Mar 2019

Fingerprint

Deregulation
Airline industry
Business performance
China
Operational efficiency
Airlines
Cash flow
Empirical data
Revenue
Technology innovation
Factors
Market potential

Keywords

  • Deregulation
  • Airline industry
  • China
  • Airline competition
  • Operational efficiency
  • Managerial efficiency
  • Impact

Cite this

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abstract = "This paper analyses the operational efficiency of the big three Chinese airline carriers post deregulation from the managerial perspective, using empirical data and by means of parametric methods in order to further understand the potential this market has for its dominant carriers. The analysis uses financial and operational data for the three dominant carriers in the Chinese airline industry and estimates the effect deregulation has had over a period from 19942012 to the dominant carriers. This analysis validates that the Chinese airline industry operational efficiency as measured by revenue and cash flow generation ability is positively associated with the load factor within a period that includes deregulatory initiatives. This finding highlights that the airlines have reacted positively post deregulation and have reasonably coped with competitive forces. Thus a further airline industry convergence is expected, on a global scale. This convergence will positively affect the Chinese airline industry, which in turn will benefit the passengers in terms of technology innovation, prices and welfare status.",
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