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National Chiao Tung University Institute of Traffic and Transportation National Chiao Tung University Institute of Traffic and Transportation Thesis 兩岸直飛政策對台灣航空產業之影響研究 Analysis of the Impact of Direct Flight Policy on Taiwanese’s Aviation Industries Advisor：Professor Jiuh-Biing Sheu Graduate Student：Susana Tsang 9936535 Taiwan 101 year 07 month 兩岸直飛政策對台灣航空產業之影響研究 Analysis of the Impact of Direct Flight Policy on Taiwanese’s Aviation Industries 研 究 生：曾玉玲 Student: Susana Tsang 指導教授：許鉅秉教授 Advisor: Professor Jiuh-Biing Sheu 國 立 交 通 大 學 交通運輸研究所 碩 士 論 文 A Thesis Submitted to Institute of Traffic and Transportation College of Management National Chiao Tung University in partial Fulfillment of the Requirements for the Degree of Master in Traffic and Transportation Management July 2012 Taipei, Taiwan, Republic of China 中華民國一 0 一年七月 Analysis of the Impact of Direct Flight Policy on Taiwanese’s Aviation Industries Student: Susana Tsang Advisor: Professor Jiuh-Biing Sheu Institute of Traffic and Transportation National Chiao Tung University Abstract For over half a century, there was no direct air transportation between Mainland China and Taiwan due to some political issues. However, the need for communication, trade exchange and globalization demand direct flight between the Taiwan Strait. After many years of negotiation, both sides of the Taiwan Strait have agreed to sign a series of cross strait agreements that help to facilitate the contact and develop the economics of both sides. In a general way, transportation system improvement can spread reductions in cost and gains in productivity through all the economic sectors that produce or distribute good. Improvement in transportation policy and/or planning can be expected to have important economic effects on carrier’s performance, shipper’s performance and the whole region economy. The purpose of this study was to investigate the behavior of the relationship among stakeholders. Another aim was to find out the effect that can provoke signing an Air Policy between Mainland China and Taiwan. Finally, establish factors in which Air Policy effect would be assesses. By this way determine which factor is more desire for each stakeholder was examined in the study. The research study used survey questionnaire to examine the opinion and desire of aviation industries with respect to the Cross Strait Air Policy effect that could have on their industries. Questionnaires were sent out to airlines companies, high tech industries and governments. All stakeholders asked to carry out the questionnaire have trade and economic activities between Mainland China and Taiwan. The results of the study were that government could contribute in the enhancement of freight transportation system. Policies released could help not only in the improvement of i freight transportation systems, also, enhancing services quality within the freight transportation system. Additionally, it was found that the introduction of air policy could change industries performance. As air policy is introduced, airlines would have the freedom to decide if they want to serve or not a market. When airlines industry served a new market, they could experiment growth in many aspect of their industry activities such as new services, more traffic, more jobs and economic growth. On the other hand, new and better air services could attract and influence in some decision and performance of other industries such as manufacturing and high tech industries. Further, it was discovered that there are many weakness in Taiwanese transportation system which Taiwan government needed to care more about. Moreover, some suggestion for aviation industries would be provided. As government plays a very important role in the freight transportation supply chain, they should develop better mode of planning and forecasting of capacity demand. Besides, as the implementation of the Cross Strait Air Policy is still recent, shippers can meet and test carrier's services quality. After ensured that carrier meet their necessity, shipper could strength their relationships. In addition, suggestion for carrier is also provided. The Cross Strait Air Policy only allows Mainland China and Taiwan airlines to have direct flight between both sides. However, only several airport at Mainland where opened for Taiwanese airlines to call at them. Asides, Mainland China has domestic air regulation in which the markets are served by specific Chinese airlines. As suggestion for Taiwanese carriers is to make alliance and partnership with Mainland China airlines, by this way, Taiwanese airlines can provide better services and complete freight flight connection for their customers. The results revealed that each aviation industry stakeholder had different concern and desire with respect to the effects that Cross Strait Air Policy could bring to their companies. In short, policies could make freight transportation become faster and reliable. Therefore, the flow of goods could be managed with more efficiency. As a result, firms could maximize their benefit and welfare by enhancing their company’s performance. KEYWORDS: Cross Strait Air Policy, Cross Strait Direct Flight, Aviation Industries, Freight Transportation System ii Acknowledgement It would not have been possible to write this thesis without the help and support of kind people around me, to only some of whom it is possible to give particular mention here. I owe my deepest gratitude to my advisor, professor Jiuh-Biing Sheu, whose encouragement; guidance and support from the initial to the final level enabled me to develop an understanding of the subject. Besides, I would like to thank professor Mu-Chen Chen, who’s always, has patience and be available to guide any student that asked for help. I would like to show my gratitude to my senior’s classmates, Ms Suru Lin and Lin- Chih Lin, whose constantly guidance, support and providing all kind of help for the development of my thesis research. I am grateful to have so wonderful parent, Mom and Daddy, whose support me financially and for their patience at all time. Besides, I would like to thank Alex Zuniga for constantly been by my side and encourage me to complete my thesis project on time. He has made available his support in a number of ways. Also, I would like to thank my friends for all the support provided during my thesis research. Specially, some of my ITT’s classmates such as Summer, Wendy, Suyun, Mg, who’s continuously provided their help with English-Chinese translation, guidance, and searching for someone to answer my survey. Thank you for all the help provided. In addition, I would like to thank all those people that take a little bit of their time filling my survey questionnaire. Last but not less important, I would like to acknowledgement CSUCA for the opportunity they gave me and for the financial support they provided me. This thesis would not have been possible unless for all the assistance my professors, senior’s classmates and classmates. I am indebted to all those people whose support me and believe in me. Thank to those who made this thesis possible. Lastly, I offer my regards and blessings to all of those who supported me in any respect during the completion of the project. Thank to those who made this thesis possible. Susana L. Tsang July 2012 iii Table of Contents Page English Abstract……………………………………………………………………….. i Acknowledge…………………………………………………………………………... iii Table of Contexts……………………………………………………………...……….. iv List of Tables……………………………..……………………………………………. vi List of Figures……………………………..…………………………………………… ix I. Introduction…………………………………………..…….……………..…….. 1 1.1. Research Background……………………………….……….………....... 1 1.2. Research Motivations………………………………...………………...... 8 1.3. Research Objectives…………………………………………….…...…... 10 1.4. Research Scope and Flow……..…………………..……….................…. 10 II. Literature Review………………………………………………...………….…. 12 2.1. Aviation Industries Development……………………………………..…. 12 2.2. Asia Pacific Operational Center…...………………………………..…… 33 2.3. Cross Strait Air Transportation Policy……………...…………...………. 39 2.4. Cross Strait Current Problem……………..………………….……..…… 50 2.5. Methodology Literature Review…………………………….…….…….. 63 2.5.1. Survey………………………………….…………..…………….…. 63 2.5.2. Analytic Hierarchy Process……………….………..………………. 64 III. Research Methodology…………………...…………………….…………….… 68 3.1. Research Conceptual Framework….…...……………………...………… 68 3.2. Research Criteria……………………...…………………...…………….. 69 3.3. Sampling Design……………………...………………...……………….. 73 3.4. Survey Questionnaires………………………………..…………………. 75 3.5. Analytical Hierarchy Process Model...……………………..……………. 78 iv IV. Data Analysis……………………………..………………………....………….. 84 4.1. Data Collection………………………………………...………………… 84 4.2. Test and Weighting Computation ……………………...……….………. 85 4.3. Analysis of all AHP’s level……………...……………...……………….. 86 4.4. Overall level of Impact of Criteria Assessment……………..………….. 106 V. Conclusions and Recommendation……….…………………..………………… 111 5.1. Discussion…………………….…………..…………………...………… 111 5.2. Managerial Implication…………….………………………….………… 113 5.3. Limitation of Study…………………………………………....………… 114 5.4. Suggestions on Future Research……...……………………….………… 115 References.……………………………………………………...……….…………..… 116 Appendix I-Research Criteria…………………….……………….…………………… 120 Appendix II-Survey Questionnaire (English version)…………………………………. 125 Appendix III-Survey Questionnaire (Chinese version)…………………………….….. 133 v List of Tables Page Table 1. Trade between Taiwan and China 6 Table 2. Change in travel time during the different period time 14 Table 3. Major airlines regions of China 16 Table
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