A Comparative Analysis Of Low Cost Carriers’ Strategy Between EU And China

The post 2008 downturn has severely influenced the development of airlines industry worldwide include low cost camiers (LCCs). While the low cost model in EU has reached a certain level of saturation, the growth regions such as China, India and Southeast Asia become to create demand for low cost carriers. Especially in China the passenger traffic increases dramatically, while Spring Airlines, as the only low cost carrier in China, still operates as a marginal player in the civil aviation market even though it maintains sustainable growth since its establishment. Different from the situation that the civil aviation market was highly regulated by the government, the country has witnessed process of deregulation in the industry. As a result, overseas low cost carriers beat a path to enter into China’s LCCs market; along with state-owned airlines strategy of joint-venture with overseas LCCs to target the market, making Spring Airlines burdensome situation even worse. What’s more, the high-speed rail network has achieved dramatically development in recent years. All these factors make low cost carriers in China strive to survive. This thesis focuses on the comparative analysis of LCCs in EU market and in Chinese market, after analyzing the macro environment and industrial context, the conclusion shows that LCCs in China is still in its inchoate stage but shared several common features with its counterpart in EU such as competition from high-speed rail. The thesis also includes case study of Ryanair, EU’s largest LCCs and Spring Airlines in later chapter; after comparison of these two airlines which develop in different phases and reveal tremendous difference, the thesis introduced the challenges faced by Spring Airlines currently and provides suggestions of what strategies can Spring learn from Ryanair, a successful player in this market.