How has Chinas airline industry developed in the past?
The airlines have grown. It all began (post 1949) with the state airline CAAC, which dispersed in 1987 into a number of regional airlines, all also state-owned. Some of those airlines have now gone public – China Eastern and China Southern are listed in Hong Kong, as is Hainan Airlines. Other airlines, including Shanghai Airlines and Air China, are waiting for the opportunity to list, while other smaller airlines are likely to get forced into shotgun mergers with the main airlines. All the Chinese airlines, still majority-owned by the state, went on aircraft buying sprees in the 1990s, and the result has been temporary over-capacity leading to discounting and price wars. But these airlines are the gatekeepers to one of the world’s last remaining frontier markets, and the global aviation industry remains in China’s thrall. The opportunities are vast, given expected economic growth of seven to eight percent per year for several years to come, and an even faster rate of growth for the Chi
