A Study On Vertical Relations Of China’s Air-ticket Sales Market

Ticket sales belongs to the downstream link in the industrial chain of aviation industry, which also can creat economic benefits directly at the end of the link.The aviation ticket sales in China was by the civil aviation only originally without entrusting sales agent.With the development of the civil aviation industry, the China’s civil aviation ticket sales agency business has experienced a rapid developmen since the mid-1980s. The aviation ticket sales agency diversifies the sales market, gradually develops into a certain scale of sales agency network.and becomes the main channel of aviation ticket sales. At present, the airlines rely on ticket agent in a high degree.and the domestic airlines tickets sales is as high as90%through the distribution channel mode.For a long time, the airlines ticket is mostly through the aviation ticket sales agency for sales, which makes computer reservation system provider and ticket sales agents become a necessary link.The airlines give the rights to the sales agents for saling the tickets, and pay the commmission and rewards to sales agents. The sales agents is responsible for the ticket sales to passengers. Through agents mode, the airlines need to pay high reservation fee to TravelSky, which is the only computer reservation system provider and almost control the whole civil aviation distributin system in China.The huge market scale and distributon network of TravelSky makes itself provide services to airlines, airports and agencies.The ticket sales by agents have been the main sales channel in aviation industry, and airlines have been trying to cut agent commission to reduce the major cost of ticket sales.With the spread of the Internet, the popularity of E-commerce, the transformation of consumption concept and the promotion of electronic ticket changes the aviation ticket sales mode. The airlines develop online electronic ticket system, widen air-ticket direct-selling channels, and increase the proportion of direct-selling and reduce the reliance on ticket sales agency and TravelSky. The construction of direct-selling channel can provide targeted services and marketing to passengers.enhance the brand loyalty, reduce airlines commission spending, so as to improve airline ticket revenue and reduce airfares. Through direct-selling the airlines can balance the independent sales and agents’market share, make themselves with more initiative, market reaction and control ability.Based on the research of present situation of the air ticket sales industry chain in our country, we analysis the vertical relations and interest mode among TravelSky, airlines and avation ticket agencies in air-ticket distribution mode as well as the study of the airline vertical integration in air-ticket direct-selling. According to the efficiency and benefits of vertical theory, the article explores the advantages and disadvantages of airline vertical integration, and the double marginalization behavior and welfare loss in the existing air-ticket sales market. Then we put forward wether the TravelSky monopolizes the air-ticket selling market or not, leading a high cost of air-ticket in China and low allcocation of resources, damaging the interests of consumers. Finally, The paper analyzes the development and vertical intergration bahavior of mature Amerian air-ticket sales market. Combine the experience of the mature Amercian market with the specific market structure in China, we put forward the development suggestions of China’s air-ticket sales market in order to regulate our air-ticket sales market, promote the fair competition, improve the efficiency of resource allocation, make our air-ticket price more reasonable, increase consumer benefits and enhance consumer welfare.