Air Transport Services in Regional Australia – Demand pattern, frequency choice and airport entry

This study investigates the development of the aviation market at Australia’s top 50 regional airports during 2005-2013. Demand estimation results suggest that a higher commodity price increases traffic volume in markets where the local economy heavily relies on mineral resources and that an appreciation of the Australian dollar decreases passenger flows in tourism-dependent areas. The presence of leading airlines and low-cost carriers, and the availability of international services all contribute positively to market growth. Airport entry analysis reveals that major carriers engage in clear strategic interactions. The Qantas airline group has used Jetstar as a fighting brand, thus that Jetstar flies to a destination if and only if the regional airport is also served by Virgin Australia, the group’s major competitor. Unlike routes connected to major airports, demands in regional airports are not sensitive to flight frequency, but seem to be positively influenced by national fare levels. Our empirical results support a consistent aviation policy across Australia, especially for issues related to airline competition and demand stimulation. However, special considerations need be made for regional airports to help them to deal with economic shocks and cover fixed costs

A review of connectivity utility models and their applications

This chapter reviews the construction of the Connectivity Utility Model (ConnUM) that measures an airport, a city, or a country’s transport connectivity. A simple measure accounting for direct air connections is first discussed, followed by an indirect air connectivity measure that considers indirect connections, and an extended multi-modal ConnUM that considers a transport network formed by multiple transport modes. We then use the model to show how China connects the world, i.e., foreign countries’ direct and overall air connectivity with China. It appears that there is a strong link between air connectivity, and international trade and tourism. This chapter has also demonstrated the usefulness of the ConnUM in conducting the vulnerability analysis of a country’s transport network

Understanding airline price dispersion in the presence of high-speed rail

This paper examines the price dispersion among China's “Big Three”, namely, Air China, China Eastern and China Southern in the presence of high-speed rail (HSR). It has been found that HSR is positively and significantly associated with airline price dispersion on the long-haul routes, which may suggest that the presence of HSR can facilitate airline cooperation in setting prices and outputs, thereby leading to greater price dispersion. However, on the short-haul routes where HSR is highly substitutable, the HSR competition effect dominates, and smaller price dispersion is observed. All the market structure and competition variables included in this study support the conclusion that price dispersion is greater in more concentrated and more densely travelled markets. The contribution of airline cost to price dispersion is limited

A comparative study of airline efficiency in China and India: A dynamic network DEA approach

Using a dynamic network DEA approach, this research examines the efficiency performance of major Chinese and Indian air carriers with a consideration of the airline's internal processes and links as well as the carry-over items that connect consecutive time periods. It is found that two low-cost carriers (LCCs), namely, China's Spring and India's SpiceJet were the most efficient carriers during the period between 2008 and 2015. China's three state-owned airlines performed poorly in both the capacity generation and service stages, particularly the latter. The second-stage regression results confirm that the LCC model and private ownership are significantly associated with better airline efficiency performance. This paper thus calls for continual reforms in China's air transport including further privatisation and policy support for LCCs and private carriers to improve the overall efficiency of this industry

CEO promotion, relative performance measures, and institutions in an emerging market: evidence from China’s listed state-owned enterprise

This paper investigates CEO turnover and the usefulness of relative performance evaluation (RPE) as a management incentive in an emerging economy lacking market-based competition. In a sample of China’s listed state-owned enterprises (SOEs) from the period 2001-2005, we find that 41% of departing CEOs in SOEs is being promoted. The promotion is positively associated with preceding firm performance relative to peers in the same region and this association is more significant than that between the promotion and firm’s specific performance. Furthermore, the promotion outperforms other incentive schemes such as CEO demotions by 5%-8% in terms of subsequent Tobin’s Q in three years. These consequences persist in undeveloped regions where there are fewer firms listed on the stock market, a lower stock market capitalization, or a higher regional Herfindahl-Hirschman Index. The findings imply that promotion based on RPE provides a critical incentive by creating competitions

Exploring the roles of high-speed train, air and coach services in the spread of COVID-19 in China

To understand the roles of different transport modes in the spread of COVID-19 pandemic across Chinese cities, this paper looks at the factors influencing the number of imported cases from Wuhan and the spread speed and pattern of the pandemic. We find that frequencies of air flights and high-speed train (HST) services out of Wuhan are significantly associated with the number of COVID-19 cases in the destination cities. The presence of an airport or HST station at a city is significantly related to the speed of the pandemic spread, but its link with the total number of confirmed cases is weak. The farther the distance from Wuhan, the lower number of cases in a city and the slower the dissemination of the pandemic. The longitude and latitude coordinates do not have a significant relationship with the number of total cases but can increase the speed of the COVID-19 spread. Specifically, cities in the higher longitudinal region tended to record a COVID-19 case earlier than their counter-parties in the west. Cities in the north were more likely to report the first case later than those in the south. The pandemic may emerge in large cities earlier than in small cities as GDP is a factor positively associated with the spread speed

COVID-19 impacts on general aviation – comparative experiences, governmental responses and policy imperatives

This article catalogues experiences of the general aviation sector as it progressively encountered the challenges of COVID-19 in the early part of 2020. The article focuses primarily on the Australian marketplace as a contribution to the body of knowledge in an under-researched industry sector. The article draws on literature pertaining to prior pandemic experience to enquire about the level of precursory preparedness in the sector, and then utilises data from 12 semi-structured interviews with experienced industry participants locally and internationally. The key findings suggest that there has been a lack of applied learning by policy makers in the past, and that generic support on offer now does not address the long term resilience of the sector nor does it address a pathway for future sudden moments of dislocation. Policies which purport to support aviation should be crafted in a way that engages all levels of industry rather than be airline centric

Characteristics of China’s air transport industry

In the past decade, high-speed rail (HSR) has emerged as a significant transport mode in China, posing a serious threat to China's air transport sector because of its potential to reduce air travel demand. According to the updated 'Medium-to-Long-Term Railway Network Plan' report covering the period 2016-2025 with an outlook to 2030, China's HSR network will by 2025 stretch to 38,000 km, including eight north-south and eight east-west trunk lines. China's liberalisation efforts were recognised by IATA, which appreciated China's commitment to progressively liberalising the aviation market and the work to harmonise the air traffic control with global standards. Infrastructure including airports, highways, and railways has received magnificent amount of investment in China since 1978. The concept of connectivity in air transport was first introduced to evaluate the importance of an airport in terms of its connection to other airports