Research On The Competitiveness Of Low-cost Airlines From The Perspective Of Value Chain

The history of civil aviation started one hundred years ago when the first commercial flight took off in 1914.Now it has become one of the major ways people choose to travel with the recovery of the world's economy after the World War ?.Airlines,as the provider of transporting service,play an irreplaceable role of integrating aviation resources.However,as the fluctuation of the world's economy and the homogenization of services that most airlines provide,the industry became unprofitable due to fierce competition and lowered service standard at the mean time.Under the circumstance,Southwest Airlines,the world's first low cost carrier(LCC),established.The good performance of Southwest Airlines showed the potential of the mold for low cost carrier and drew the attention from the entire industry.In decades,low cost carriers boomed around the world not only in number but also in market share due to the success of Southwest Airlines,bringing about the new competition pattern between legacy carriers and low cost carriers.Academia has been analyzing the LCC model in different aspects since most low cost carriers behaved relatively well within the intense competition.The research in this article is based on theoretical overview of value chain theory and competitiveness theory,combining the existing research on such theories.The author decomposed and restructured the LCC value chain by fitting those theories into the civil aviation market nowadays so as to reflect the value increment process of low cost carriers in operating.By analyzing the value increment process,the author can abstract the competitiveness that low cost carriers hold in competing the legacy carriers.In case study,statistics from fifteen public low cost carriers are selected based on the above theoretical framework in order to analyze the competitiveness from aspect in value chain.The statistics contain five year financial and operating data of those airlines from 2013 to 2017.The data model is run by a statistics software,using factor analysis.Then compare the four resulting major factors to observe whether the major factors change in the five consecutive years.The major factors represent the main competitiveness of low cost carriers,which are cost control,operational control,marketing,technical innovation,human resource and scale competitiveness.Sample airlines are ranked based on the results of the analysis.And the reason of changes and differences in competitiveness are listed accordingly.In the end,constructive suggestions are offered according to the practical problems and the realities of Chinese low cost carriers.