| The key to the steady development of the Chinese aviation industry is to steadily promote the process of deregulation.Since the Chines civil aviation reform in 2002,the Civil Aviation Administration of China(CAAC)has gradually changed his role from a manager of this industry to a supervisor.The Chinese aviation market has launched the competition and game between the CAAC and the stakeholders of the civil aviation industry,including airlines and airports.As a regulator,CAAC has different policy objectives under different times,but the stable development of aviation industry has always been one of the important responsibilities of CAAC.In the process of gradual reformation,CAAC has gradually mastered the characteristics of industry development,and relevant policies are becoming more flexible and effective.Taking the important market entry regulation policies in recent years as examples,the first case is the lowcost carrier entry regulation implemented at the end of 2013 when the Chinese leisure travel market was eroded by a large number of foreign airlines.Then,under the background of "multi-airport system"(MAS)in Beijing,the inconsistent policy implementation plan appeared in order to solve the time slot allocation problem of airlines in the MAS.Finally,under the background of the outbreak of COVID-19 in 2020,CAAC liberalized the control of the non-stop route market of Beijing,Shanghai and Guangzhou to small airport.These cases reflect that the policy of CAAC has gradually changed from a "one size fits all" model to a more detailed and targeted policy.In addition,different policies will affect each other.For example,low-cost carrier entry deregulation does not mean that low-cost airlines can enter all routes at will,the strict restrictions on the entry of hub airports such as Beijing,Shanghai and Guangzhou also let low-cost carriers cannot squeeze out traditional incumbents.And the entry deregulation of the non-stop flight connecting hub and small airport must also be supported by a certain subsidy policy for small airports,so that the former policy can get better results,especially when the outbreak of COVID-19 has led to a sharp reduction in passenger travel wishes.This undoubtedly reflects the gradual maturity and systematization of the relevant policies implemented by CAAC.This paper studies the policy effects of Chinese civil aviation in promoting the deregulation of market entry regulation under different backgrounds,such as low-cost carrier entry deregulation,the deregulation of time slot allocation of Air China and China Eastern in Beijing’s multi-airport system,and the entry deregulation of the nonstop flight connecting hub and small airports.These market entry deregulation cases also require some supporting policies and measures,such as liberalizing airport charging and increasing subsidies for some regional airports,so as to ensure the implementation of the policies and achieve better results.This study takes Chinese aviation market entry regulation as the research object,divides it into three levels of entry regulation,namely carrier access,time slot access and route access,and discusses the impact of the three policies on the competitive behavior of stakeholders.Chapter 4 studies the relationship between low-cost carrier entry regulation and airlines’ competition behavior.Chinese leisure travel market was eroded by a large number of foreign airlines,the CAAC deregulated the entry of low-cost carriers(LCCs),which brings opportunities for the development of domestic private LCCs.This section investigates the promotion role of LCCs to enter the market under the deregulation policy,and the crowding out effects of LCCs to traditional full-service airlines through combining theoretical model and empirical analysis.The results show that the entry of LCCs not only reduces the ticket prices of direct and one-stop flights of full-service airlines,but also reduces the passenger volume and flight frequency of all flights with low-cost operation routes,which can show that the entry of LCCs into a certain route market is bound to have a crowding out effect on the full-service airlines on the route.For CAAC,when it pays more attention to the airlines’profit,it will not release the access control of LCCs.On the contrary,when it pays more attention to the benefit of passengers,it is more inclined to reduce the entry deregulation of LCCs.In addition,when the market with small potential market scale or the operation cost of LCCs is low,it can encourage the CAAC to release the access control of LCCs.The empirical part confirms that this deregulation policy promotes the entry of LCCs,which will have a crowding out effect on full-service airlines.At the same time,LCCs are more inclined to enter long routes that are not hubs.This is to avoid direct competition with traditional full-service airlines and high-speed rail,so as to obtain a certain living space.Chapter 5 investigates the deregulation of airport time slot access and the competition in a MAS.Taking Beijing MAS as the background,this section examines the motivation of CAAC’s inconsistent contradictory policies on intervening in the operations of Air China and China Eastern.A multi-stage game-theoretical model is developed in the context of the regulated MAS,examining the regulator’s policy in airport slot allocation and airlines’ airport entry decisions in the MAS.The regulator has a mixing objective to put different weights on passenger surplus and airports/airlines’ profits.It can choose to intervene in airline allocation or not.It is found that by assuming zero market entry costs,when the regulator does not intervene in airline allocation,airlines choose to enter both airports in the MAS,bringing about higher social welfare.But the regulator would intervene if it puts a sufficiently high weight on airports/airlines’ profits.When the differences of passengers’ willingness to pay in the exclusive market and the operating costs of the two airports get larger,the regulator is less likely to intervene,while allowing airlines to freely choose airports.When the airports can also strategically adjust airport charges,the regulator will find it is always optimal not to intervene.Chapter 6 discusses the route entry deregulation and market competition.With international air travels largely banned around the world amid the global COVID-19 pandemic,many gateways and hub airports have more ideal slots available for reallocation.Airport traffic recovery replaces airport congestion to become the primary challenge of major airports around the world.With the pandemic well controlled domestically in China,the government liberalizes the hub airport slots for those previously forbidden services to the small/regional airports.This paper thus analytically examines the effect of this slot liberalization.The government subsidy to the small airports has also been considered.It is found that the slot liberalization can speed up airport traffic recovery for both hub and small airports.The hub airport slot liberalization leads to a lower level of minimum subsidy to sustain the survival of the small airports.Given any fixed level of subsidy to the small airport,both the total airport traffic and social welfare would improve with the slot liberalization at the hub airport.When the government can adjust the level of subsidy after liberalizing the hub airport slots,the subsidy could be excessive,if the government emphasizes too much on airport traffic recovery.This would,however,harm the overall social welfare. |
