Entry and market dynamics: The impact of low-cost carriers in China

IF 6.8 1区工程技术 Q1 ECONOMICS

Transportation Research Part A-Policy and Practice Pub Date : 2025-09-17 DOI:10.1016/j.tra.2025.104675

Long Shi , Qihong Liu , Dongliang Pang

引用次数: 0

Abstract

This paper examines the impact of low-cost carriers (LCCs) on the pricing strategies of full-service carriers (FSCs) in the Chinese airline market. We first analyze the effect of LCC presence and find that LCCs exert significant downward pressure on FSC fares, with the magnitude of this impact varying across carriers and routes. Next, we explore the dynamic responses of incumbent FSCs to the entry and the threat of entry by LCCs. Our findings reveal that FSCs begin lowering fares well in advance of LCC entry, with fare reductions of approximately 11 %–18 % occurring as early as the 8th quarter before entry. The fare reductions intensify as the entry date approaches and persist beyond it. On the other hand, FSCs do not seem to respond to LCC entry threats. Our analysis highlights the importance of considering the dynamic pricing responses of FSCs rather than relying solely on LCC presence which is commonly used in the literature studying Chinese LCCs.

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进入和市场动态：低成本航空公司在中国的影响

本文研究了中国航空市场中低成本航空公司对全服务航空公司定价策略的影响。我们首先分析了低成本航空公司存在的影响，发现低成本航空公司对FSC票价施加了显著的下行压力，这种影响的程度因航空公司和航线而异。接下来，我们将探讨现有金融服务公司对低成本公司进入和进入威胁的动态反应。我们的研究结果显示，fsc在低成本航空公司进入市场之前就开始降低票价，早在低成本航空公司进入市场前的第8个季度，票价就下降了大约11% - 18%。票价的降低会随着进入日期的临近而加剧，并且在进入日期之后会持续下去。另一方面，fsc似乎对LCC的进入威胁没有反应。我们的分析强调了考虑fsc的动态定价响应的重要性，而不是仅仅依赖于LCC的存在，这在研究中国LCC的文献中是常用的。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Transportation Research Part A-Policy and Practice 工程技术-运输科技

CiteScore

13.20

自引率

7.80%

发文量

257

审稿时长

9.8 months

期刊介绍： Transportation Research: Part A contains papers of general interest in all passenger and freight transportation modes: policy analysis, formulation and evaluation; planning; interaction with the political, socioeconomic and physical environment; design, management and evaluation of transportation systems. Topics are approached from any discipline or perspective: economics, engineering, sociology, psychology, etc. Case studies, survey and expository papers are included, as are articles which contribute to unification of the field, or to an understanding of the comparative aspects of different systems. Papers which assess the scope for technological innovation within a social or political framework are also published. The journal is international, and places equal emphasis on the problems of industrialized and non-industrialized regions. Part A''s aims and scope are complementary to Transportation Research Part B: Methodological, Part C: Emerging Technologies and Part D: Transport and Environment. Part E: Logistics and Transportation Review. Part F: Traffic Psychology and Behaviour. The complete set forms the most cohesive and comprehensive reference of current research in transportation science.