CORE Metadata, citation and similar papers at core.ac.uk Provided by University of Southern Queensland ePrints China’s airline deregulation since 1997 and the driving forces behind the 2002 airline consolidations Yahua Zhanga,*, David K. Rounda aCentre for Regulation and Market Analysis, School of Commerce, University of South Australia, Adelaide, SA 5000, Australia *Corresponding author. E-mail address:
[email protected] Phone: +61 8 830 20601 Fax: +61 8 830 27001 Abstract: This paper seeks to document and describe events in the last decade in China’s airline markets, and to clarify some misunderstandings in regard to the 2002 airline consolidations that brought sweeping changes to China’s aviation markets. Some possible reasons for the 2002 consolidations are inferred through analysing the numbers and facts of the late 1990s and early 2000s. We conclude that the consolidations may be a natural response to the changes that accompanied airline deregulation in China. Keywords: Deregulation, airline mergers, China 1. Introduction China’s airline markets have attracted the attention of many major international carriers, but have largely failed to attract the attention of academics. Literature on China’s airline markets remains relatively sparse, owing to the country’s opacity in aviation policies and the limitations of data availability. The dramatic changes that took place in China’s airline industry in the past 20 years, from a period of strict regulation and control to being relatively uncontrolled and loosely supervised, resulted in chaotic and unexpected outcomes. Those within the industry had two opposing attitudes towards these changes: some applauded them and called for further reforms, while others resisted and demanded a return to regulation.