Research On Low-cost Operation Strategies Of China Eastern Airlines X Branch

With the difficult recovery of world economy and slow growth of domestic economy,civil aviation industry in China still maintained a high growth rate. By the end of 2013,passenger transport volume of civil aviation industry reached 353.97 million, increased by10.8% compared with last year. With the continuous growth of economy and residents income levels, more and more travelers choose the aircraft as a way to travel. Nonetheless,annual per capita flight in China is nearly 0.26 times, but the number in US and Europe is 2 to3 times. That shows the development potential of civil aviation industry in China is large.Meanwhile, it means that the vast majority of people can’t form an effective demand, mainly because air travel in our country is still luxury consumption. Although the airline has introduced discount tickets, the high price still can’t meet the need of ordinary people and guest rate is still not ideal. The fundamental reason is that the current operation mode of airline made high operation cost and limited the space of price decline. Therefore, from whether the view of its own development or the perspective to meet the market demand,low-cost airline business model is imperative in our country.It has important significance on developing low-cost operation strategy for China Eastern Airlines. The reasons are as follows. First of all, the low-cost airline operation strategy can meet the needs of different levels of passenger. Since our country is in economic take-off stage, most ordinary people can not afford the expensive airfare, low-cost airlines operation strategy can stimulate demand for travelers to help build a healthy and reasonable national transportation system. Secondly, the paper comparatively studies various low-cost airline business models to build a operation way with Chinese characteristics for domestic enterprises. This can provide sufficient theoretical experience for potential market entrants.Finally, air transport popularization can promote the development of industrial upgrading and service areas. Civil aircraft manufacturing industry in China is currently in the initial stage.Air lines which develop low-cost operation strategy mainly purchase small and medium aircrafts. This can simulate development of civil aircraft manufacturing industry and lead to comprehensive upgrade of manufacturing industry.This article firstly consolidated related low-cost airline theory, and then summarized the domestic and international low-cost airline business model. Then as an example of China Eastern Airlines X Branch, we use PEST model, porter five model and SWOT analysis tools to analyze the micro environment of China Eastern Airlines X Branch. Through analyze the cost structure of China Eastern Airlines X Branch, we revealed the questions in the course of business. The questions are as follows: low aircraft utilization, high labor costs and high aircraft acquisition and lease costs resulted in high operational costs. Finally, the article pointsout the measures taken by China Eastern Airlines X Branch in operational process. The measures include establishing correct market positioning, implementation of efficient marketing strategies, developing a reasonable human resources plan, building low-cost operating framework, creating a good corporate culture.The article explores whether the large stated-owned airlines can make low-cost operation and points out the practical plan. It makes a reference in response to low-cost airlines.