Airline Performance in China and India: What Drive Airline Efficiency and Pricing

Kun Wang, University of British Columbia, Sauder School of Business, Anming Zhang, University of British Columbia (UBC) - Sauder School of Business and Yahua Zhang, University of Southern Queensland analyze Airline Performance in China and India: What Drive Airline Efficiency and Pricing.

ABSTRACT: China and India’s air transport sector exhibits substantial differences 30 years after deregulation. The strong presence of private and low-cost carriers and the intense route-level competition are the key drivers for an overall better performance for Indian carriers measured by technical efficiency. The low-cost carrier has the effect of reducing the air fare and promoting the demand in India. However, in China, the entry of a low-cost carrier has not had such effects. We also found that airport concentration in India could lead to cost savings and thus lower air fare, but this did not occur in China.