Analysis On Chinese Civil Aviation Industry Organization

There can no be turning back for the civil aviation industry of our country to open to the outside world, which means that they have to face to the strong challenge from the oversea civil aviation organizations, meanwhile they are executing the internal transformation to satisfy the deep reforming. Who can win the competition among the domestic and oversea aviation brothers? The key is the performance. On the angle of theory, since American economist Bain originally created the analysis model known as"structure-conduct-performance", the relationship of the three factors has been the study focus in the science of Industry Organization Theory. Therefore, to improve the performance of our civil aviation industry, it's very necessary to study the relationship of the three factors: market structure-conduct-performance of Chinese civil aviation industry.This article takes Chinese mainland civil aviation market as the object of study. By building up such versatile indicators reflecting the civil aviation market structure, conduct and performance, as market concentration ratio, HHI, NEC, the civil aviation load capability as well as the load rate, the nominal return ratio and so on, the simultaneous equations model is created. This article takes the structure variable, behavior variable and performance variable as dependent variables, choose time series data from 1985 to 2005 as study sample and employ the Three Stage Least square to estimate the model. The influence which the civil aviation structure and behavior imposed on the performance is discussed, and the feedback imposed by performance and behavior on the structure is discussed too..The following are the main findings. The 2002-year reorganization of the civil aviation has remarkable influence on the market structure, and the market structure tends to be high oligopoly. because of the reorganization. In addition, the number of the transportation aircrafts and that of the scheduled flights have remarkable influence on overall load capability. The staff labor productivity of the civil aviation and using efficiency of airplane as well as the load ratio, the 1992-year price deregulation variable have remarkable impact on the market performance. When we consider structure-behavior-performance as a whole, the market performance has remarkable influence on the market structure and the market behavior, at the same time, the market behavior has remarkable influence on the market performance too. But the market structure has no remarkable influence on behavior and performance. It indicates that the structure of Chinese civil aviation does not impose decisive influence on behavior and performance, and the structure does not demolish the market efficiency, although the structure belongs to high oligopoly.Finally, based on the conclusion of this study, the author brings out some suggestion from two aspects: the government and the civil aviation company. We expect the suggestion could improve civil aviation performance so that we can cope with the strong challenge.