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.