CHINA'S AIRLINE REORGANIZATION AND ITS SPATIAL EFFECTS

Recently China has reorganized its nine state-owned airlines into the "Big Three": Air China, China Southern Airlines and China Eastern Airlines. All airlines, both national and regional, have become to operate as business entities. This notable event indicates that China is taking substantial, albeit still cautious, measures to deregulate its airline industry. This paper investigates the event in the context of China's airline industry development and reform and lays particular stress on its spatial effects. The study reveals that airline liberalization in China is intertwined with renewed regulation, more obvious during the reorganization period. Two important spatial effects may be observed: the dominance and geographical coverage of major airlines have been greatly enhanced; and the spatial structure of airline networks is changing from city-pairs to a hub-and-spoke system