Study On The Performance Of Horizontal M&A In China's Air Transport Industry Companies

As an important industry, air transport plays an important role in domestic economic growth. The Chinese air transport industry, especially, has enormous development potential. Since the 80s of last century, Western developed countries are gradually relaxed the control of the air transport industry, which led to a significant increase in merger events. Ever since the market reform of air transport industry in China, merger and acquisition (M & A) gradually became an important means of management system reform and market restructuring. As the degree of administrative intervention is relatively high in M & A process, the effectiveness of M & A is still worth further study.Based on the theories of scale economy and synergy, this paper studies the performance of horizontal M & A of China's air transport industry. The paper firstly reviews the current literature on the topic of horizontal M & A in air transport industry and performance of horizontal M & A. It also makes theoretical analysis for performance source of horizontal M & A of air transport industry companies on this base. The paper sums up the basic M & A situation of China's air transport industry and makes a case study with the merger events of Southern Airlines, Xinjiang Airlines and Northern Airlines. Finally, the paper summarizes the research findings and case revelations, and makes policy recommendations to all stakeholders.Through research this paper found:although the horizontal M & A of China's air transport industry is carried out under the guidance of the government, it basically achieves the expected purpose and gains the value of scale economy, synergy, business process, route network optimization and restructuring, as well as improves the solvency, operating capacity and profitability of the airlines, through the operational and financial data of China Southern Airlines before and after horizontal M & A. However, the value of M & A can only be revealed after merger integration is finished. On the other side, profitability of the airlines brought by horizontal M & A will completely release and gradually decline after a period of time, while China's air transport industry has already gone into the era of low margins, so airlines have to find cost-effective ways to improve its operational and cost control capacity before and after M & A in order to effectively improve the airline's core competitiveness. The research findings have certain theoretical and practical value.