Research Of Airlines' Dynamic Price Game Based On Multi-oligopoly

In recent years, the civil aviation transportation industry of China has been rapidly developing with the annual average growth rate of passenger volume remaining at more than 10%. China has become the second largest aviation market of the world following with USA.Firstly, in order to investigate the present air transportation market structure in China more exactly, it's laid emphasis on using the way of data statistics to calculate passenger transport volume, fleet and share holdings status of each domestic airline to make figures and tables after getting the absolute concentration of market CRn and Herfindahl--Hirschman Index(HHI). Therefore, it can research the type of domestic air transportation market structure and evolution trends of recent years in different views. On basis of features of air transportation market, it compares and analyzes the results of CRn and HHI index. It can be proved that the domestic air transportation market is a multi-oligopoly competitiveness market. Otherwise, it's concluded that game theory can be applied in researching air transport market.Secondly, in accordance with the analysis, a nonlinear multi-oligopoly airlines' dynamic game price competition models of single airline product and multi-airline product is established. It's used Matlab software to analyze the complexity of the system which is consisted of the model, numerical computation and simulation of the models. By the variation of each airline' price adjusting speed, the conditions of the game system before the equilibrium state is analyzed. It's clear that the results of simulation shows that whatever the initial values is, it can only affect the time to the equilibrium state with every parameters decided. With the increasing game cycle, the competition can get into disordered state. In disadvantage competitive conditions, if keeping the price adjusting speed in the stability region, airlines may gradually change the pricing strategies in time to make the average profits over the other competitors.This paper researches the domestic civil aviation transportation market in China with the reliable data and reasonable ways. On the base of researching the aviation transportation market structure, it establishes the price competition models of airlines to make strategic advice for the management of each airline. These pieces of advice can avoid the disordered state of the aviation transportation market with promoting the steady development of civil aviation industry in China.