IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v205y2026ics0965856426000248.html

Market reactions to new aircraft deployment in China’s domestic Aviation: A panel vector autoregression analysis of C919

Author

Listed:
  • Jiang, Yonglei
  • Wang, Chunan
  • Wang, Lei
  • Liu, Shuli
  • Zhang, Anming

Abstract

This paper examines market responses to the commercial deployment of China’s domestically developed C919 jetliner across nine major domestic routes, using high-frequency flight-level data and public attention indices. By estimating a system-GMM panel vector autoregression (PVAR), we test whether a new aircraft type shifts demand and pricing. Results indicate a two-stage dynamic: attention spikes often precede selective entry; after entry, fare cuts and load factor gains are modest and short-lived, with behavior reverting as operations stabilize and scheduling/demand dominate. Carrier heterogeneity is present but does not overturn the qualitative pattern. This study provides empirical insights into the diffusion of emerging aircraft models and offers guidance for aviation management and industrial policy within the context of China’s evolving air transport system.

Suggested Citation

  • Jiang, Yonglei & Wang, Chunan & Wang, Lei & Liu, Shuli & Zhang, Anming, 2026. "Market reactions to new aircraft deployment in China’s domestic Aviation: A panel vector autoregression analysis of C919," Transportation Research Part A: Policy and Practice, Elsevier, vol. 205(C).
    • Handle: RePEc:eee:transa:v:205:y:2026:i:c:s0965856426000248
    DOI: 10.1016/j.tra.2026.104883
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856426000248
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2026.104883?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Wang, Kun & Xia, Wenyi & Zhang, Anming & Zhang, Qiong, 2018. "Effects of train speed on airline demand and price: Theory and empirical evidence from a natural experiment," Transportation Research Part B: Methodological, Elsevier, vol. 114(C), pages 99-130.
    2. Givoni, Moshe & Rietveld, Piet, 2009. "Airline's choice of aircraft size - Explanations and implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(5), pages 500-510, June.
    3. Louis Mulotte, 2014. "Do Experience Effects Vary Across Governance Modes? Evidence from New Product Introduction in the Global Aircraft Industry, 1948–2000," Organization Science, INFORMS, vol. 25(3), pages 757-775, June.
    4. Park, Yongha & O'Kelly, Morton E., 2018. "Examination of cost-efficient aircraft fleets using empirical operation data in US aviation markets," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 224-234.
    5. Kühlen, Markus & Kölker, Katrin & Linke, Florian & Dahlmann, Katrin & Gollnick, Volker & Lütjens, Klaus, 2023. "From passenger itineraries to climate impact: Analyzing the implications of a new mid-range aircraft on the global air transportation system," Journal of Air Transport Management, Elsevier, vol. 113(C).
    6. Liu, Xueying & Madlener, Reinhard, 2021. "The sky is the limit: Assessing aircraft market diffusion with agent-based modeling," Journal of Air Transport Management, Elsevier, vol. 96(C).
    7. Hu, Qiwei & Zhang, Anming & Zhang, Yahua, 2019. "Why are regional jets less used in emerging economies? A real options valuation approach and policy implications," Transport Policy, Elsevier, vol. 79(C), pages 125-136.
    8. Michael R.M. Abrigo & Inessa Love, 2016. "Estimation of Panel Vector Autoregression in Stata: a Package of Programs," Working Papers 201602, University of Hawaii at Manoa, Department of Economics.
    9. Volodymyr Bilotkach, 2015. "Are airports engines of economic development? A dynamic panel data approach," Urban Studies, Urban Studies Journal Limited, vol. 52(9), pages 1577-1593, July.
    10. Brueckner, Jan K. & Zhang, Anming, 2010. "Airline emission charges: Effects on airfares, service quality, and aircraft design," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 960-971, September.
    11. Wang, Kun & Gong, Qiang & Fu, Xiaowen & Fan, Xingli, 2014. "Frequency and aircraft size dynamics in a concentrated growth market: The case of the Chinese domestic market," Journal of Air Transport Management, Elsevier, vol. 36(C), pages 50-58.
    12. Zhang, Anming & Wan, Yulai & Yang, Hangjun, 2019. "Impacts of high-speed rail on airlines, airports and regional economies: A survey of recent research," Transport Policy, Elsevier, vol. 81(C), pages 1-19.
    13. Severin Borenstein, 1989. "Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 344-365, Autumn.
    14. Love, Inessa & Zicchino, Lea, 2006. "Financial development and dynamic investment behavior: Evidence from panel VAR," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(2), pages 190-210, May.
    15. Klepper, Gernot, 1990. "Entry into the market for large transport aircraft," European Economic Review, Elsevier, vol. 34(4), pages 775-798, June.
    16. Michael R. M. Abrigo & Inessa Love, 2016. "Estimation of panel vector autoregression in Stata," Stata Journal, StataCorp LLC, vol. 16(3), pages 778-804, September.
    17. C. Lanier Benkard, 2004. "A Dynamic Analysis of the Market for Wide-Bodied Commercial Aircraft," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(3), pages 581-611.
    18. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    19. James D. Dana Jr., 1999. "Equilibrium Price Dispersion Under Demand Uncertainty: The Roles of Costly Capacity and Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 632-660, Winter.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Yahua & Sampaio, Breno & Fu, Xiaowen & Huang, Zhibin, 2018. "Pricing dynamics between airline groups with dual-brand services," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 46-59.
    2. Loris André & Julio Ramos-Tallada, 2025. "Green Finance and Deforestation Reduction in Brazil: a PVAR Analysis of the Amazon Fund," Working papers 998, Banque de France.
    3. Ma, Wenliang & Wang, Qiang & Yang, Hangjun & Zhang, Guoquan & Zhang, Yahua, 2020. "Understanding airline price dispersion in the presence of high-speed rail," Transport Policy, Elsevier, vol. 95(C), pages 93-102.
    4. Anastasiou, Dimitrios & Drakos, Konstantinos, 2021. "European depositors’ behavior and crisis sentiment," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 117-136.
    5. Wu, Xiangru & Wang, Kun & Fu, Xiaowen & Dong, Kangyin & Sun, Xiaoqian & Hoon Oum, Tae, 2025. "How does COVID-19 pandemic affect airline’s route choice and market contact? − Full-service carriers vs. low-cost carriers in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 191(C).
    6. Qureshi, Fiza & Khan, Habib Hussain & Rehman, Ijaz Ur & Ghafoor, Abdul & Qureshi, Saba, 2019. "Mutual fund flows and investors’ expectations in BRICS economies: Implications for international diversification," Economic Systems, Elsevier, vol. 43(1), pages 130-150.
    7. Mounoufie Valery KOFFI & Moro Jean-Pierre EBY & Dago Okoubi Arthur YAO, 2025. "Relationship Between Macroeconomic instability and current account in WAEMU countries," Bulletin of Applied Economics, Risk Market Journals, vol. 12(2), pages 165-174.
    8. Marwil J. Dávila-Fernández, 2018. "Alternative Approaches to Technological Change when Growth is BoPC," Department of Economics University of Siena 795, Department of Economics, University of Siena.
    9. Yang, Hangjun & Ma, Wenliang & Wang, Qiang & Wang, Kun & Zhang, Yahua, 2020. "Welfare implications for air passengers in China in the era of high-speed rail," Transport Policy, Elsevier, vol. 95(C), pages 1-13.
    10. Kaelo Mpho Ntwaepelo, 2021. "The Effects of Macroprudential and Monetary Policy Shocks in BRICS economies," Economics Discussion Papers em-dp2021-20, Department of Economics, University of Reading.
    11. Chen, Yilin & Hou, Meng & Wang, Kun & Yang, Hangjun, 2023. "Government interventions in regional airline markets based on aircraft size—Welfare and environmental implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 169(C).
    12. Dimitrios Karamanis, 2022. "Defence partnerships, military expenditure, investment, and economic growth: an analysis in PESCO countries," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 173, Hellenic Observatory, LSE.
    13. Kumeka, Terver Theophilus & Uzoma-Nwosu, Damian Chidozie & David-Wayas, Maria Onyinye, 2022. "The effects of COVID-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies," Resources Policy, Elsevier, vol. 77(C).
    14. Klein, Paul-Olivier & Turk-Ariss, Rima, 2022. "Bank capital and economic activity," Journal of Financial Stability, Elsevier, vol. 62(C).
    15. Joan Costa-Font & Cristina Vilaplana-Prieto, 2023. "‘Investing’ in care for old age? An examination of long-term care expenditure dynamics and its spillovers," Empirical Economics, Springer, vol. 64(1), pages 1-30, January.
    16. Julián Caballero & Andres Fernandez & Jongho Park, 2016. "On Corporate Borrowing, Credit Spreads and Economic Activity in Emerging Economies: An Empirical Investigation," IDB Publications (Working Papers) 95296, Inter-American Development Bank.
    17. Fatma Pinar Erdem Kucukbicakci & Etkin Ozen & Ibrahim Unalmis, 2020. "Are Macroprudential Policies Effective Tools to Reduce Credit Growth in Emerging Markets?," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 6(1), pages 73-89, June.
    18. Lee, Enoch & Kawakita, Takuya & Huai, Yue & Lo, Hong K. & Zhang, Anming, 2024. "Airline and high-speed rail collaboration and competition under travel time variability," Transportation Research Part A: Policy and Practice, Elsevier, vol. 185(C).
    19. Stelios Giannoulakis, 2021. "Uncertainty, firm entry, and investment dynamics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(5), pages 623-642, November.
    20. Alan Duncan & Abebe Hailemariam, 2025. "Come and say G’day: Using search engine data to understand the dynamics of tourism demand in Australia," Tourism Economics, , vol. 31(7), pages 1428-1451, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:205:y:2026:i:c:s0965856426000248. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.