Research On Competitive Strategy Of Air China In Chengdu-Chongqing Market

The affiliates of Air China Limited(hereinafter referred to as “Air China”)in Chengdu and Chongqing have a common ancestor,known as China Southwestern Airlines,which was headquartered in Chengdu and based in Chongqing,and used to be the mainstream choice of air passengers to or from these two cities.The areas around Chengdu and Chongqing are evolving into Chengdu-Chongqing Economic Circle,and is likely to become the fourth growth pole of China’s economy,but meanwhile Air China is facing the challenge of its traditional competitive advantage in this region.The current study attempts to make an analysis of Air China’s competitive strategy in Chengdu-Chongqing region,for the purpose of competitive advantage rebuilt.In macro-circumstance view,China’s economy enters a new stage of development,as the focus of macroeconomic regulation turns to quality and benefits of development,the civil aviation industry’s pace of growth is bound to change.Domestic airlines will be difficult to maintain the profitability without implement of strategic adjustment and innovative development.Technical advancement and expectations of customers are providing impetus for innovation.And regulations on state-owned capital and civil aviation industry have created good conditions for development of the three state-owned air transport companies,which should be innovative and promising.From the perspective of key business indicators,Air China shows better management ability than its competitors in Chengdu-Chongqing civil aviation market,based on the fact that Air China always seeks for excellence as a participant of the whole process of the China’s civil aviation industry’s reform and development.Chengdu-Chongqing area is far away from North China,East China and South China,so the high-speed railway does not pose a threat.Meanwhile,challenges remain in the industry,including restrict from airport authorities because of their management system,and restrict from IT service supplier originated from its monopoly situation.Proper measures to resolve contradictions is urgently needed.Although Air China has a good foundation in terms of resources,and is resilience at the headquarters level,it lacks a clear competitive strategy in Chengdu-Chongqing market.This is the problem the author tries to solve.The author takes Air China and its Southwest Branch,Chongqing Branch as the research object,following Professor Porter’s research paradigm of Structure-Conduct-Performance,firstly to grasp the development trend from the macro-circumstance analysis of politics,economy,social culture and technology.Then to observe the competitive situation industry in Chengdu-Chongqing civil aviation market by analysis of the five competitive force.Based on the judgment of opportunities and challenges,the author observes Air China’s available resources in Chengdu and Chongqing,as well as the abilities it has and abilities can be developed.After completing the external and internal analysis,and based on the development stage of the market and the overall strategy of Air China,the competitive goals can be identified.Based on SWOT analysis method,the thesis chooses the competitive strategy of Air China in Chengdu-Chongqing market,and formulates the implementation plan and determines the key safeguard measures.Upon a series of analysis,conclusion can be summarized as follows: Air China should implement differentiation strategy in Chengdu-Chongqing market,including differentiation of air hub,differentiation of smart services and differentiation of integrated development.Air China should be the leader of Chengdu-Chongqing civil aviation market,and build the strategic partnership with Chengdu-Chongqing Economic Circle and Chengdu Chongqing world-class airport group.As a practitioner and researcher of China’s civil aviation industry,the author hopes this thesis will contribute to the practice of national hold airlines serving the national strategy.