Study On The Influence Of The Slot Allocation Policy And Strategic Behavior Of Airlines On The Airlines’ Competitive Advantages In China

The strategic behavior of airlines is the focus of Micro-Industrial Organization Theory.Under the market mechanism,airlines hope to obtain competitive advantages through selecting and implementing the strategic behaviors.External conditions and regulatory policies also influence on their competitive performance.In China’s air transportation market,Airlines segment and preempt the geographic markets through establishing branches in recent years.It has significance to studying the influence of the slot allocation policy and strategic behavior of airlines on the airlines’ competitive advantage in China.Based on the predecessors’ studies,the relevant factors including the degree of competition between city-pair markets,the strategy of partner companies,the size of demand,the existence of low-cost airlines,and the congestion of airports are summarized.The history of the establishment of branches of China’s airlines and the changes of China’s slot allocation policy are also summarized.The results of theoretical analysis show that China ’s slot allocation policy protects incumbent airlines,especially those has market power,and makes it difficult for new entrants to enter a new market.The establishment of branches of airlines improve their competitive advantages by improving their local influence,service quality,and ability of offsite operation.However,the size of improvement may be different in different operating areas.In the empirical part,based on a sample of all city-pairs in China from 2007 to 2017,using high-dimensional regression panel models,DID and PSM-DID models,mediation effect models,and sub-sample regression models,conclusions are drawn.Airlines have a higher competitive advantage in city-pair markets with strict policy management,which is reflected in capacity share and the ability to obtain new slots.The market share of airlines in the previous period enhances its current competitive advantages.The establishment of branches to improve the competitive advantages of airlines.The improvement of the establishment of branches of the airlines in the area where the headquarters is located will be greater.Because of higher costs and wider competition,the improvement of the establishment of branches of the airlines outside the headquarters area is smaller.The establishment of a branch has an intermediary effect on the improvement of the airline’s competitive advantage.The establishment of a branch improves airlines’ competitive advantages through improving airlines’ local influence.Finally,relevant policy suggestions are put forward.