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Benchmarking the performance of Chinese airlines: An investigation of productivity, yield and cost competitiveness

Author

Listed:
  • Wang, Kun
  • Fan, Xingli
  • Fu, Xiaowen
  • Zhou, Yiran

Abstract

In the past decade, the Chinese airline industry experienced extraordinary growth in size and profitability. However, no quantitative study has investigated the performance of Chinese airlines in terms of productivity and cost competitiveness. This study investigates the leading Chinese airlines' productivity, yield, cost competitiveness and input prices, and benchmarks them against major airlines around the world. It finds that Chinese airlines' productivity has improved significantly in the past decade but still lags behind that of industry leaders. Chinese carriers enjoyed high yields and low input prices in the domestic market, which led to high profitability in recent years. However, their cost advantage has been diminishing. To sustain long-term growth, Chinese airlines need to adopt the industry's best practices in a timely manner. Both the aviation markets and input markets in China should be further liberalized.

Suggested Citation

  • Wang, Kun & Fan, Xingli & Fu, Xiaowen & Zhou, Yiran, 2014. "Benchmarking the performance of Chinese airlines: An investigation of productivity, yield and cost competitiveness," Journal of Air Transport Management, Elsevier, vol. 38(C), pages 3-14.
    • Handle: RePEc:eee:jaitra:v:38:y:2014:i:c:p:3-14
    DOI: 10.1016/j.jairtraman.2013.12.012
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    References listed on IDEAS

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