Analysis Of China's Low-cost Airlines Profit Model

2019 is the 70 th anniversary of the establishment of People's Republic of China(PRC).During these decades,China's society and economy have developed at a high speed.In recent years,China has actively constructed high-speed railways,covering almost all provinces and regions.With the construction and operation of high-speed railways,the aviation industry,especially the civil aviation industry,has suffered a huge impact.An output reduction agreement adopted by OPEC in 2016 directly led to the continuous rise in international crude oil prices,and also placed a heavy burden on global airlines.Each airline had to find and innovate a profit model that meets its own needs to ensure profits and enable The company was able to survive this storm of production cuts and even made a breakthrough.In 1971,Southwest Airlines introduced a profitable model of low-cost operations and achieved amazing results in practice.Its characteristics are mainly the selection of short and medium-haul routes with large passenger flows and the cancellation of some traditional flight attendant services.Making air tickets cheaper than other mainstream airlines is popular with many travelers.Under the influence of Southwest Airlines,this model was copied by various airlines in a short time,and low-cost airlines began to sweep the world.On May 26,2004,a private airline that changed the pattern of China's aviation industry was born in Shanghai,bringing low-cost airlines to China,which is Spring Airlines.In the following years,Spring Airlines continued to adjust and optimize the low-cost operating model in accordance with the domestic market environment and development direction,so that it could better meet the needs of society and itself.Eventually,it was well known and recognized by the Chinese people.This article mainly analyzes the components of Spring Airlines' profit model,analyzes the financial data of Spring Airlines in the past five years,and compares it with China Southern Airlines,one of the four major airlines in China,and Juneyao Airlines,one of the private airline representatives.The analysis shows that its profit model has a single profit point,reduced profit leverage,and a weak profit barrier.From the analysis of financial data,it is found that its profitability has gradually declined.The problems of the profit model have been demonstrated,and personal countermeasures have been proposed.Proposal to modify Spring Airlines' profit model.Spring and Autumn Airlines has performed well in the industry and has been profitable since its inception.It is a representative enterprise of China's low-cost airlines.Studying and analyzing Spring Airlines' profit model will help to explore the actual operating capabilities of this model in airlines,and will have a positive effect on the development of China's aviation industry and even the transportation industry.It is hoped that the research in this article can be used as a reference for China's aviation industry and other transportation industries in adjusting their profit models and improving financial performance.