Publication Date
Topic(s) Covered:
  • Transportation

Given the size of the country’s air transportation market, China could have three mega carriers that have the potential to become world-leading players within five to 10 years. But first, the country must address a number of competitive issues.

The future of China’s air transportation industry was the central theme of the China Air Transportation Policy and Regional Economic Development Conference organized by the Ningbo Supply Chain Innovation Institute China (NSCIIC). The event took place on September 18, 2017 in Ningbo, China, and attracted over 100 attendees from academia, industry, government and the media.

“To improve productivity and market performance of Chinese airlines will be a crucial task for the coming five to ten years,” said Professor Shaoxuan Liu, Director of NSCIIC, in his opening address. In today’s extremely competitive air transportation market some Chinese carriers may face the risk of bankruptcy, but can be revitalized if they strive to compete with world-leading airlines, he said.

Professor Tae Hoon OUM, UPS Emeritus Professor of Transport and Logistics, University of British Columbia, Canada, and visiting faculty as NSCIIC, pointed out that the productivity of China's aviation industry has been growing rapidly in recent years, but remains lower than those of European and American airlines. Still, the outlook for domestic companies is positive. He believes that the immediate solution to the industry’s development challenge is to introduce a mechanism to foster China-made low-cost airlines. Also, China's low-cost airlines must be motivated to establish short-haul routes.

Another speaker from the University of British Columbia, Professor Zhang, focused on the competition between air transportation and high-speed rail in China. According to Professor Zhang’s research, cooperation between the two industries can be fostered if they develop combined service offerings that are more convenient for passengers.

The role of government in the liberalization of air transportation was discussed by Professor Martin Dresner from the University of Maryland in the US. He maintained that the Chinese government should formulate policies that promote air service agreements and airport designs that meet the demands of airlines, passengers, and other related parties, and maximize the social benefits of air transportation.

Fu Xiaowen, Associate Professor at the University of Sydney, Australia, explained the impact of governance structures and property rights on airports. “Privatization generally increases the operational efficiency of the airport in the form of property rights or governance, but the source of this efficiency comes largely from the freedom of managers,” he said. Dr. Fu cited relevant examples from Hong Kong and Singapore.

Government can play a significant role in spurring the development air transportation. Dr. Hiroshi Ohashi from Japan described the impact of changes in Japan's aviation policy on the country’s air transport industry following the bankruptcy of Japan Airlines. The Japanese government released a series of policies designed to speed up the development of Japan's aviation industry.

Prof Liu emphasized that NSCIIC will continue to conduct research in key areas such as aviation policy making, aviation management, airport development, and the economic planning of airports.

More information on NSCIIC research in the aviation field is available from Vanessa Wu, Marketing and Communications, NSCIIC, phone: +86 (0) 8901 0037, email:

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