Research On Strategic Cost Management Of Airlines Of China

As to cost measures, we should scrutinize the cost in a broader background rather than focus on the cost itself. Therefore, it is necessary to explore the problem of cost management from a strategic perspective. Cost management is important for the development and advantage of our airlines in the aerial transportation market with increasing competition. Nowadays, the competition of the airlines is essentially the competition of cost among the airlines. As a result, the competition of price can become a triumph weapon only when we depend on the innovation of cost management and the low cost. The object of strategic cost management is to create internal and external circumstances in which the price can be kept moving down and reduce the cost in the segment of value chain and so on. Accordingly, it could be beneficial to consolidate the long-term competitive advantage and strengthen the strategic status of airlines.The paper puts forward the strategic cost management of our country, basing on the strategic cost management mode of Professor Shank and absorbing the thoughts of strategic cost management in many overseas airlines. In this paper analyses the airlines in China focus on utilizing three analysis tools of strategic cost management: value chain; strategic posting; cost driver. Finally, it evaluates the system of strategic cost management in China by choosing index and model and using the DEA(Data Envelopment Analysis) model, which has supplied scientific theory and methods for the airlines' implementing the effective cost management strategy. Hoping it can be helpful for improving the cost management of airlines in our country.