Analysis On Low-Cost Strategy Of Chinese Airlines

Since their appearance 30 years ago, low-cost airlines (LCAs) have succeeded all over the world, and have recently become a globally prevailing trend. LCAs now take an active part in the Asian aviation market, especially indicated by Southeast Asian LCAs extending into China, a potential huge marketplace. But China's regulatory environment may hamper LCAs'development. How can the state-owned civil aviation groups rival the emerging LCAs like Air Spring? How should the existing local civil aviation companies choose their direction of development? How could the LCAs manage to make a steady way? Such are the serious problems which Chinese aviation sector has to, or will have to, face.Guided by the theory of competitive strategy, this paper studied the features of the business model of foreign low-cost airlines (LCAs) by employing M. Porter's cost leadership strategy concept. After analyzing the external environment and internal resources of China's aviation businesses during their carrying out a low-cost strategy (LCS), the author discussed the critical issues related to the implementation of a LCS by China's aviation businesses, and performed a case study of Air China.