Philip Hofbauer

Market Opportunities for Low-cost Carriers in China: a Strategic Market Assessment of China's Aviation Industry Philip Hofbauer

Since the emergence of LCCs on the markets in North America, Europe and Southeast Asia, this business strategy has gained much attention by researcher as well as the public. As this business strategy was highly successful and profitable in these markets, the first privately-owned airlines in China are tapping into this field. The author analyzes the Chinese domestic airline market from a strategic and comprehensive perspective applying Porter's Five-Forces theory of market competition as well as a PEST analysis. In the second part, customer expectations of Chinese airline passengers are collected through a field survey and are investigated with regard to the traditional features of LCCss. By combining both analyses, the author finds an increasingly deregulated market that already allows many features of the LCC strategy to work, while identifying still existing barriers that are obstacles for LCCs. In his conclusion, the author presents suggestions and recommendations for possible entrepreneurs and investors as well as the respective regulatory bodies to create a market environment that brings increased consumer benefits to the Chinese passengers.