Research On Low Cost Strategy Of Spring Airlines

After the World War Ⅱ,the world ushered the golden age of civil aviation.The United States slackened the civil aviation industry in the 1970s.It pushed the development of Southwest Airlines,which was been prepared since 1967.The Southwest Airlines developed rapidly in the effective implementation of.the highly competitive US aviation market with low-cost competitive strategy in 1971.Up to now,it has nearly a quarter of the market share,up to nearly two-thirds of the market share of routes within 500 km,and sustains gaining profits year after year.In recent years,the expansion speed of the low-cost aviation in the global market has been accelerated.In 2003,low-cost airline’s market share accounted for only 12.2%in the global,however,it rapidly rised to 25.5%in 2015.In 2003 the market share of Asia-Pacific was 3.4%and it increased by about seven times to 25.1%in 2015.In the aviation mileage,the global low-cost aviation mileage share has now reached 30%,while the Chinese market is only 8.3%,the disparity with the world level is huge,It means that there is a large space for Chinese low cost companies to develop.Spring Airlines was set up under the joint investment of Spring International Travel Service and Shanghai Spring travel agency in November 2004,which is one of one of private aviation enterprises in China’s first low-cost airline batch.And at the beginning of 2015,Spring Airlines shares were listed on the Shanghai Stock Exchange.Mainly engaged in domestic and international business,including I long Kong,Macao and Taiwan areas’ air passenger,cargo transport and air transport associated services.To the end of 2016,Spring Airlines had 66 Airbus A320 aircrafts,open 75 international regional routes,120 domestic routes and its passenger rate is as high as 93%.What’s more,it set up four operating base in the East China’s Shanghai,North China’s Shijiazhuang,Northeast China’s of Shenyang and Southern China’s Shenzhen since the first navigation.Spring Airlines growed from small to large,from weak to strong,developed rapidly in the fierce competition circumstances of China’s civil aviation market since its inception.Its success dues to ensured flight safety and high quality services which continually combine their own existing resources with lessons from the advanced experience of foreign low-cost airlines,such as Southwest Airline,UK’s Ryan Air,Malaysia’s AirAsia.It’s good at grasping good opportunities of the times and the market,did not copy the existing traditional full service aviation model and chose to seek their own low-cost competitive development strategy which can meet the broad market demand.By using the "Two Single","Two High" and "Two Low"ways of operation,it consolidated the foundation in the market.Affected by the huge state-owned airline market share and the introduction of foreign aircraft,aviation fuel supply and procurement of materials relative to the monopoly,the policy as well as the size of funds and other restrictions,China’s low-cost aviation development rate is relatively slow presently.In recent years,the State Council,Development and Reform Commission,Civil Aviation Authority and other departments have issued a series of policies on the good civil aviation industry,civil aviation industry in particular the development of low-cost aviation began operations,Hainan Airlines in May 2013 changed its subsidiary western aviation transformation into low-cost airlines to have a try,saying it will continue accelerating the construction of the model in the future;In January 2015,Nine Yuan aviation in Guangzhou began operations which is the first low-cost airlines in Central Southern China.As for now,China has six low-cost aviation enterprises,local aviation enterprises in Hebei and Tianjin Airlines is also actively planning the transformation of the domestic competitive landscape has taken shape.In addition,foreign low-cost airlines began to get involved in China’s sailing market,industry competition pressure further intensified.In recent years,China’s civil aviation industry competition pattern presents a further direction towards diversification,the emergence of new changes and new trends,with the accelerated urbanization process,the international market oil prices fluctuation,and January 2015 Spring Airlines in Shanghai Securities Exchange listing and a series of changes,it is necessary to consider and in-depth study in the new environment of the new situation on the Spring Airlines low-cost strategy.Based on the actual situation and future trend of China’s civil aviation industry in recent years,this paper analyzes the politicies,economy,society and technology environment by using the PEST model combination with the specific operation of the Spring Airlines:Use Professor Porter’s five forces model to analyze its competitive environment;Use SWOT analysis method to analyze its advantages,disadvantages,opportunities and challenges;Use Professor Porter’s overall cost leadership,differentiation strategy and target concentration strategy comparative analysis the the rationality and necessity of Spring Airlines’ choosing low-cost competition strategy;compare the traditional full-service airlines and domestic low-cost airlines with low-cost operation of the Spring and conduct a comprehensive evaluation of the Spring Airlines strategy in the existing problems and give a feasible proposal and specific measures.The development of aviation industry has a bright future.The result of this paper is to analyze the competitive strategy of macro and micro environment under the current Spring Airlines,which is of practical significance.This paper attempts to draw pn the model construction of low-cost aviation in the Chinese market and the entry of airlines;provide practical advice for the future development of low-cost aviation strategy,and also expect the cost management experience to be used by full service airlines,To promote the common development of China’s civil aviation industry,and promote the strategic realization of civil aviation power.