China’s airline consolidation and its effects on domestic airline networks and competition

Abstract

Air transportation in China has experienced tremendous growth and major reforms in the past three decades. While there is a large literature on airline liberalization, publications about China are limited. As China transforms from a centrally planned economy to a market economy, how closely has China followed the practice of liberalizing the airline industry seen in other countries around the world? This paper offers a review of air transportation development in China and compares China’s approach with other countries. In particular, this study examines the impact of the government-led airline consolidation of 2002 upon domestic network structure and competition.