In the past decade, the Chinese airline industry experienced
extraordinary growth in size and profitability. However, no quantitative
study has investigated Chinese airlines’ performance in
terms of productivity and cost competitiveness. As a result, apart
from the country’s strong economic growth, the forces driving this
phenomenal development remain unclear. This study quantifies
the recent developments in the Chinese aviation market by investigating
the performances of leading Chinese carriers during the
2001 to 2010 period, and benchmarks the results with representative
airlines from Asia, North America and Europe. Our analysis
suggests that Chinese airlines steadily improved their operational efficiency during the sample period. However, they still lag behind
leading airlines in developed markets. The Chinese airlines’ Total
and Partial Factor productivities are lower than those of their international
peers, especially those from North America. There has
been no productivity convergence between carriers in China and
North America, making it difficult for Chinese airlines to enhance
their competitiveness in the international markets.
In the past decade, the Chinese airline industry experiencedextraordinary growth in size and profitability. However, no quantitativestudy has investigated Chinese airlines’ performance interms of productivity and cost competitiveness. As a result, apartfrom the country’s strong economic growth, the forces driving thisphenomenal development remain unclear. This study quantifiesthe recent developments in the Chinese aviation market by investigatingthe performances of leading Chinese carriers during the2001 to 2010 period, and benchmarks the results with representativeairlines from Asia, North America and Europe. Our analysissuggests that Chinese airlines steadily improved their operational efficiency during the sample period. However, they still lag behindleading airlines in developed markets. The Chinese airlines’ Totaland Partial Factor productivities are lower than those of their internationalpeers, especially those from North America. There hasbeen no productivity convergence between carriers in China andNorth America, making it difficult for Chinese airlines to enhancetheir competitiveness in the international markets.
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