Research Of Product & Competition Strategy Of China Aviation Group

The air transportation was started in the early 20^th century. Since then, the commercial aviation has become one of the most important parts of our modern society and economy. Along with the integration of world economy and trade and capital, the trends of regionalization and globalization are coming forth, and the boundary between the domestic and international aviation market is becoming less distinct. Meanwhile, the technological tendency of management, the coalition of enterprises, the alliance of operations, and the privatization of property rights are the popular trends in the aviation industry. Nowadays, the monopolistic airlines and giant airline federations are the main force in the air transportation industry.American air transportation is the pioneer of the world air transportation and its management mode has been followed by other airlines in the world. Chinese air transportation has made significant progress in the past years, but is still behind the world leading airlines in scale, profit, cost, and competition ability. After joining WTO, Chinese air transportation will encounter an increasing domestic demand and the threat from foreign airlines. What to do and where to go for the Chinese airlines will have a crucial impact on the development of Chinese economy. The consolidation into three airline groups, on October 11,2002, marked the beginning of opening in the air transportation market in China. The Air Transportation Bureau no longer assumes the responsibility of debts of the airlines. It is expected that there will be profound changes in Chinese air transportation market in the coming years. The new China Airline Group corporation contains three regional airlines, Air China(AC), China Airlines (CA) and China South West Airlines (CSWA). It is not clear whether the combination will necessarily increase its competitive ability. Admittedly, combination is a good method to decrease cost, to supply advantages, to find new profit field and to solve problems. To new China Airline Group corporation, the key to success relies on taking the source advantage and developing competitive advantage.The purpose of this thesis is to study the market and product strategies for China Airlines Group based on contemporary background in the 21st century, using the basic economic theories. The content of the thesis is focused on three facets. First of all, it analyses the traits of demand, supply and cost hi air transportation market. Secondly, it does deliberate research the reasons for the success of American air market. And it provides the basic driving forces behind the development- the technology of management, such as CRS, FFP, Code Sharing and Equity Alliances. Lastly, this thesis provides suggestions for reference purposes about market development and product design considering the reality of China Air Group and the market of Chinese air transportation.