Analysis On Aviation Industry Reform Of China

Aviation industry is traditionally regarded as a natural monopoly industry which shows characteristics of economies of scope, economies of scale and economies of network. However, along with development of economics and technology, the industry becomes more and more competitive. Under the wave of deregulation or liberalization towards natural monopoly industries from the 1970s, the development of natural monopoly theory plays an important role. Through the cases of liberalization in global aviation market, deregulation of American airline industry was considered as the most influential one. The success of the deregulation as well as the opposite may give us some ideas concerning reform on civil aviation industry of China. This article evaluates the economic effects of China's reform on aviation industry, concerning the change about the nature of aviation industry mentioned above. Furthermore, we make a retrospect of American deregulation, comparing its background, economic effects and procession with what is happening in China, from which the author hope to obtain some ideas and suggestions. In the end, this article will give some suggestions on China's reform of aviation market.