Market Conduct of the Three Busiest Airline Routes in China

This paper studies the market conduct of the three busiest routes dominated by the three largest airlines in China. The competition strategies of the three largest Chinese carriers are found to be different from each other. In general, the market behavior of Air China is consistent with that described in the Cournot solution. Both China Southern Airlines and China Eastern Airlines demonstrate competitive behaviors somewhere between Bertrand and Cournot. However, the former is closer to Cournot, whereas the latter is closer to Bertrand. The authors find that the Cournot model seems consistent with the competition between China Eastern Airlines and Air China. Their results suggest that Stackelberg competition develops with China Eastern Airlines as the leader and China Southern Airlines as the follower. They also find that China Eastern Airlines adopts a low-price strategy to compete for market share. Due to its lowest costs, Air China earns the highest profits among the three airlines. The authors also find that the competition among the three carriers becomes more intense over time.

• Record URL:
  • http://www.icms.polyu.edu.hk/Proceedings/Proceedings%20of%20IFSPA%202012.pdf
• 
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/isbn/9789623677578
• Supplemental Notes:
  • Abstract reprinted with permission of Hong Kong Polytechnic University.
• Corporate Authors:

  Hong Kong Polytechnic University

  Department of Logistics and Maritime Studies
  Tung International Centre for Maritime Studies
  Hong Kong,   China 
• Authors:
  • Zhang, Qiong
  • Yang, Hangjun
  • Wang, Qiang
• Conference:
  • International Forum on Shipping, Ports and Airports (IFSPA) 2012: Transport Logistics for Sustainable Growth at a New Level
  • Location: Hong Kong , China
  • Date: 2012-5-27 to 2012-5-30
• Publication Date: 2012

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References; Tables;
• Pagination: pp 54-63
• Monograph Title: Proceedings of the International Forum on Shipping, Ports and Airports (IFSPA) 2012: Transport Logistics for Sustainable Growth at a New Level

Subject/Index Terms

• TRT Terms: Air routes; Air transportation; Airlines; Competition; Market share; Mathematical models
• Identifier Terms: Air China; China Eastern Airlines; China Southern Airlines
• Geographic Terms: China
• Subject Areas: Aviation; Economics; Finance; I10: Economics and Administration;

Filing Info

• Accession Number: 01482967
• Record Type: Publication
• ISBN: 9789623677578
• Files: TRIS
• Created Date: Jun 3 2013 9:22AM