The Exploration Of Chinese Low Cost Carriers’ Operation Mode

China has huge potential civil aviation market with over1.3billion population. In2011, total passenger turnover of Chinese civil aviation industry reached293.17million.That stands for every Chinese citizen only taking0.23times of flights a year, while thenumber is around2-3times for United Sates and Europe. Most people cannot raise theirdemand for taking flight since travelling by air is still a luxurious expenditure. Thefundamental cause is that the solidified operation mode will bring high operation cost andhigh ticket price. Both form the angel of airlines’ own needs and the demand of the market,LCC operation mode will develop imperatively under Chinese situation.The purpose of this paper is to analyze and invent Chinese LCC operation mode byillustrating the case of Jetstar Hongkong Co., Ltd. Jetstar Group, the wholly ownedsubsidiary of Qantas Airways，China Eastern Airlines and SHUN TAK Group started a JVJetstar Hongkong Co., Ltd.which will be put into operation by the end of2013.Threeshareholders will equally own33.3%share of Jetstar Hongkong. It is the first time forChina Eastern Airlines to be involved in LCC business. The fleet size will reach18in threeyears. It will be the first LCC based in Hongkong.This paper analyzes the case of Jetstar Hongkong by adopting PEST model to analyzethe micro environment of Chinese civil aviation, which shows this current situation andtrend is beneficial to the establishment and development of LCC. Based on the experienceof foreign airlines, author built the SWOT model for Jetstar Hongkong and recommends itsstrategy and established its operation mode.According to the analysis of this paper, Jetstar Hongkong should focus on costleadership strategy with short and middle haul flight orientation, tidy organizationframework, tight cost control, creative auxiliary revenue and all staff participationcooperate culture.Illustrated by the case of Jetstar Hongkong, it comes with the conclusion that whatChinese LCC should do to win the market is to carefully choosing the target markets and routes, strictly control costs, creating excellent company’s culture and build the corecompetence with its own characteristics.