The Effects Of M&A On The Enhancement Of International Competitiveness Of Chinese Airlines

In the context of continuing development of economic globalization and regional economic integration, international competition will be fiercer and the international competitiveness of airlines will influence the survival of themselves, along with gradual opening up of global aviation market and traffic right and further development of liberalization of international air transportation. Major airlines' creations of “super carriers”through M&A, especially those of European and American air transport giants, pose a great challenge to Chinese airlines. Unfortunately there is an obvious truth that the competition of Chinese civil aviation industry is still weak as a whole in the international market. In order to survive in severe market competition and acquire a competitive strength to rival the powerful foreign counterparts, Chinese airlines should take an important initiative to gain larger scale and strength through merger and acquisition(M&A).Based upon profound analysis of the influencing factors and formation mechanism of international competitiveness and the relationship between M&A and international competitiveness, this paper establishes an evaluation indicator system for international competitiveness of airlines in aspects of scale level, operation benefit, operation management,market performance and internationalization level, using factor analysis for evaluation.Furthermore, an empirical research is made on the case of China Eastern Airlines' merger of Shanghai Airlines to testify the effectiveness of the above-mentioned study. In the end countermeasures and suggestions which facilitate the enhancement of international competitiveness of Chinese airlines through M&A based upon empirical analysis are concluded. Through the study conclusions can be drawn that China Air Transport enterprises of mergers could obtain such effects of M&A as economies of scale and synergies of operation, management and finance. Thus the resource utilization and overall management efficiency could be improved and the international competitiveness of Chinese airlines could be enhanced, with the realization of the future sustainable development of Chinese aviation industry.