| The Civil Aviation Industry (CAI) is the basic industry and the life blood of national economy. Chinese CAI is a young and rapidly growing industry, it promotes the developments of other Chinese industry, especially tourism.The total transport turnover has been increased 179 times,from 0.299 billion ton-kilometers in 1978 up to 53.845 billion ton-kilometers in 2010.The reform of Chinese CAI has gone through four stages from strictly-control to deregulation,these reforms bring vitality to the civil aviation market and improve the operational efficiency. Private Economy has become a new army to make contributions to the development of every industry and bring great vitality to the market since the reform and opening-up policy brought into practice. Of course, private capital invest in the civil aviation industry. In March 2005,Aokai airline' first flight represents the beginning of a new era in CAI history and it marks the ending of the history that state capital monopolized the civil aviation market. After that, Spring Airlines, United Eagle Airlines, China Express Airlines, East Star Airlines etc. began to have the materiality operation of the airlines. Private airlines became a new force of the civil aviation.With the releasing in the state system and the growing social demand, the private airlines have better opportunities. But the private airlines, as the new entrants of CAI that has great monopolistic characteristics, will face different obstacles. Currently, only Spring Airlines operates normally. May 9,2011, East Star Airlines prosecuted Civil Aviation Administration of China because CAAC has been adjudicated East Star Airlines bankrupt because of its grounding. Aokai Airlines also can't gain the same return as before after its suspended. And other airlines changed its main business to cargo.Why the private economy didn't achieve the anticipated results. This question leads to the contents of my research----Barriers to Entry. Barriers to Entry is one of the core issues in industrial organization, it refers to possible adverse factors that the entrants and new firms may encounter when they compete with existing firms. For those private economy who want to enter into the civil aviation, they will face not only economic barriers but also institutional barriers. Why these barriers formed, how to measure and how to reduce it. Such are the study of my essay. This papers describes the development of CAI and its'economic & management characteristics by the use of the latest statistics and the motivation of civil airlines. On the basis of the theory of industrial organization(IO) and for an example of Spring airlines, this paper defined the concept of Barriers to Entry for the private airlines. According to Chinese civil aviation market and the special community ideology, this papers build the analytical economical and institutional framework. In the economic barriers analysis part, this papers analysis every barriers comprehensively such as economies of scale, absolute cost advantage, special resource advantage, essential capitol. In the institutional barriers part, this papers divide the institutional barriers into outer and inner part and finally define the institutional barriers.From the above analysis, we conclude that the economical barriers are not very clear and with economic development and technological progress, the economical barriers will decline. Besides, the economical barriers mostly come from the institutional barriers effect, such as the government regulation, antitrust, administrative law and other aspects of social ideology. Institutional barriers are divided into outer and inner barriers. The inner and outer institutional barriers are influenced by each other, and the relationships between them are replaced, complementary and neutral. In the last part, this papers give the policy proposals for the private airlines and the whole CAI. |
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