Research On Low-cost Operating Model Of Private Airlines In China

With the decentralization of the China Administration of Civil Aviation (CAAC), both the nongovernmental business and foreign capital are allowed to invest in the field of civil aviation. CAAC approved to set up 4 private airline companies such as UE Airlines, Okay Airlines, Spring & Summer Airlines and China Express Airlines in the year of 2004.As a result the structure of civil aviation industry has been changed.How can the private airline companies compete in the market? Which is the best operating model? In order to solve these problems,the paper divides three parts. First, study of low-cost carriers in foreign countries, such as the operation model of some well-known low-cost airlines in America, Europe and Asia. Second, study of policies of civil aviation industry and the circustomes of Chinese civil aviation market. Third, study of private airline companies'operating model and developing strategy.The author makes use of industry economics, management economics and competitive strategy theory, revenue management model and many research methods such as comparative analysis, qualitative analysis and quantitative analysis, theory analysis and example analysis.The paper discusses the feasibility and necessity of developing the low-cost carries.The author doesn't just make use of the low-cost operating model of foreign airline copanies.Considering the chareteristics of our private airline companies and the circustomes of Chinese civil aviation market,the author puts forwards some main paths for realizing the low-cost operation model in China. Through the analysis the author thinks that low-cost operating model is good for private airlines.