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Air China Cargo Co., Ltd. Development Strategy

Posted on:2005-03-20Degree:MasterType:Thesis
Country:ChinaCandidate:A YanFull Text:PDF
GTID:2206360122485950Subject:Business Administration
Abstract/Summary:PDF Full Text Request
According to the forecast done by Boeing and Airbus, the air cargo transport in the world is growing in a high speed, around 6.3% to 6.4% every year in the future. Prompted by the healthy economy growth and bright expectation, the air cargo market in China is predicted to grow in a yearly rate of 10% in the next two decades, and will be an engine for the air cargo development in Asia, even the world. Due to its own characteristics, air cargo transport has become the priority-choice for some customers. Air cargo transport is experiencing a rapid growth in China.Thanks to the rapid growth, the status of air cargo transport is widely emphasized, from "strong on passenger and weak on cargo" and "passenger and cargo as a whole" to "separating cargo from passenger". The domestic airlines are establishing their own independent cargo airlines in succession, like China Eastern, China Southern and Hainan airlines.At the same time, the foreign airlines are swarming into the Chinese air cargo market. As statistics show, about 60 foreign airlines are carrying out their international air cargo and mail operation in 40 cities in China. Among the international air cargo and mail throughput in the airports of Beijing and Shanghai, air cargo and mail turnover carried by foreign airlines has accounted for 65% and 50% separately. Moreover, the foreign express companies like UPS and FedEx has accounted for more than half of the express market share in China. As the government agent of aviation in China, CAAC is intended to increase its steps of "Open Skies" and "Cargo-first Passenger-next Opening Policy" in the coming years.The challenges faced by cargo airlines in China are more than these above. Besides the express airlines and integrators, the cargo agents are trying to share the big cake of air cargo transport as well. According to the policies of Chinese government, followed the entry into WTO, the air transportation market in China will be further opened, and the gate of serving and trading including transport and logistics will be further opened as well.As the largest and latest-established cargo airlines in China, Air China Cargo has the widest international route network and leading throughput of cargo and mail in China. However, its status is being threatened by both domestic and international airlines. Where should Air China Cargo go? As the employee in Planning Department of Air China Cargo, I feel the pressure and ponder about the destiny.Meanwhile, in the modern society, people are having more knowledge about the logistics. The concept that logistics has become a key revenue source of a company is widely accepted. Are there any sharing point between aviation and logistics? What can be done to combine these two together? Upon the graduation of MBA program, after collecting lots of materials and reading many articles related to logistics, I wrote this essay as my gradation thesis, in which I compared the same points and differences between transportation and logistics, between traditional company and the third logistics company, analyzed the necessity of developing third-party logistics among air transport companies, discussed three operating modes of logistics and their feasibilities in an angle of value chain, and also introduced the developing status of logistics companiesdomestically and internationally.In the end I focused my discussion on Air China Cargo. According to the current situation, with the help of SWOT analysis, I conducted internal and external analysis and came up with the strengths and weaknesses, opportunities and threats of Air China Cargo, proposing the idea of moving from traditional, simple freight transport to integrated logistics provider, and also suggesting two steps: firstly "consolidating the primary operation and developing the logistics", and then "to be a logistics provider". Finally I came up with the action plan to carry out this strategy.I think that doing this research will not only be valuable to Air China Cargo, but also be inspirational for other companies.
Keywords/Search Tags:air cargo transport, logistics, strategy.
PDF Full Text Request
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