Why Chinese airlines haven’t become leading cargo carriers - analyzing air freight network and international trade drivers for mainland China

Abstract

In contrast to the tremendous growth in the passenger sector, Chinese airlines and logistics operators still play relatively minor roles in the world’s air cargo market. This study investigates the air freight network within mainland China using complex network analysis, and identifies the key drivers for international trade delivered by air with an augmented gravity model. Our network analysis suggests that domestic air freights flow through a relatively small point-to-point network. Demands are concentrated in the catchments of metropolitan regions, where passenger hubs have not served as cargo gateways. International air cargo flow is more balanced than China’s overall merchandise trade. As a result, foreign carriers can cherry-pick the most lucrative markets and link them to their global networks. Gravity model estimation suggests that for China’s international trade by air, the composition of the economy is a more important driver than the simple size of the economy. Therefore, air freight demand in China was not as high as past GDP numbers suggested, but is likely to outpace overall economic growth in the years to come. This should help Chinese airlines to achieve their cargo ambitions in the long term

    Similar works