Air China - Case Study

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  • Topic: Beijing Capital International Airport, Air China, IATA members
  • Pages : 12 (3476 words )
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  • Published : January 15, 2013
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The Overview of Airline Industry in China & the Analysis of Air China Limited (key player in the market)

Table of contents
Introduction………………………………………….………………………………….3 Market Overview
* Market definition…………………………………………………………………….……3 * Research highlights……………………………………………………………………….3 * Market Analysis…………………………………………………...………………………4 Theoretical Analysis…………………………………………………………………….7 The Leadership of Air China Limited

* Brief Introduction about the Corporation………………………………………9 * The Leadership in the Airlines Industry………………………………………….9 * How Leadership Delivered Competitive Advantage……….…………….11 Bibliography……………………………………………………………………….13 Appendix…………………………………………………………………………….14

Introduction
* This paper aims to provide a comprehensive overview of Chinese airlines industry and deep analysis related to Air China Limited (how leadership delivered competitive advantage). In terms of overview of Chinese airlines industry, there are four major parts are touched in the following content: market definition, research highlights, market analysis, and theoretical analysis (SWOT). Based on the reliable and useful research data, the author has presented a critical evaluation on it. In terms of the analysis of Air China Limited, the author divided it into two parts – the leadership in the airlines industry (discussing the theories of leadership followed by evidence on leadership) and how leadership delivered competitive advantage.

Market Overview
* Market Definition
Since the day Wright Brothers created the first airplane in the beginning of the 19th century, the airline industry has grown from a great dream of human-beings (taking people to the sky) into reality – one of significant transport system in the world, which carrying over 1 billion passengers nowadays (Steve, 2010). With the rapid growth of airline industry in the past decades, global economy has raised with an amazing rate. Based on the statistics supported by one of market researchers of Datamonitor - Davidson Katter, ‘from the year of 2003 to 2010, the total value of the global airlines markets has created corresponded to 1.4 trillion US dollars; and more important, the growth rate was keeping increasing between 2003 to 2007 (the average growth rate was 5%). Although we were facing a global economic crisis during 2008 to 2009, the growth rate has fell down (around 2-3% lower than 2007), the total value that created by global airlines industry still remain a relatively high level’ (Davidson, 2011). In the contemporary world, the airlines industry has become one of most important transport tools in both propose of business and leisure travel.

* Research Highlights
As the target market for this paper is Chinese airlines industry, so some relevant researches are necessary. According to the data by China National Aviation Corporation, in 2009, the total revenue of whole domestic airlines industry was $25.2 billion, compared to 2008, it decreased $1.2 billion. In other words, the annual growth rate was over – 4.8% (Ruan, 2010). If we consider the period between 2008 and 2009, naturally we would remind the global economic crisis. By contrast, at this period, American airlines market has received a dramatic decline in terms of annual growth rate (dropped around 15%); also, EU market has similar negative performance with 12.5% decrease (Benjamin, 2011). Consequently, compared to other airlines markets in the world, the Chinese market was relatively stable.

The outstanding performance of Chinese airlines industry has caused a group of oversea media and governments’ attention. Such mainstream press British Broadcasting Corporation (BBC) and American Broadcasting Corporation (ABC) respectively broadcasted massive news related to Chinese airlines industry. For instance, on 24th of December 2009, only one day before Christmas, ABC published a journal...
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