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Abstract
The following thesis examines China‟s civil aviation industry in the context of its
current conception and the competitive behavior of its airlines in the domestic market. By
analyzing the current competitive conduct in the market, the strategic position of the airlines
and the level of state intervention will be revealed. In order to investigate the airlines‟
competitive behavior in the domestic market a set of two theoretical approaches will be
applied. By the means of the „Choice Theory‟, the influencing factors of choosing the most
suitable airline for a trip will be identified. Furthermore, the „Pricing Theory‟ will be used to
describe the phenomena of discounted fares and yield management created by the airlines in
order to maximize their revenues. The analysis itself consists out of a 40 day long examination
of the lowest fare development in three distinct city pairs.
The results of the analysis will display that although the domestic market is of an
oligopolistic nature, it is a competitive environment with its airlines strategically positioning
themselves from another. It will further indicate that the smaller carriers in the market refrain
from entering in direct competition with the larger airlines and finally, it will also reveal that
there is state intervention towards the booking and pricing policies of the airlines.