Subsidy policy to win the airline airport also to fight the price war?

Domestic civil aviation, whose price has been flying all over the world, has now spawned a new term, the subsidy war.

Recently, Sanya Phoenix Airport of Hainan Province announced that in the future, it will “paste money” to flights to and from Sanya’s important source areas and newly opened international flights to and from Sanya. The amount will be 3,500 yuan to 5,000 yuan per trip. Just four months ago, Haikou Airport, another major airport in Hainan Province, also announced that it would provide financial subsidies to domestic airlines that newly added passenger flights and routes. The standard is to increase the source of passengers by 30 yuan or 35 yuan per person.

In recent years, the price war has been seen in civil aviation. The sixty-seven percent discount ticket is commonplace, and the three-four percent discount ticket is also frequently shown. Under the "strike force" of the price war, domestic airlines almost all "ultra-low-altitude flights", pursuing small profits but quick turnover. In contrast, the airport is more like a "trick" to face south: no matter how many planes you have, how many routes, whether you are private or state-owned, whether you are targeting low-cost airlines or targeting high-end business travelers, Although the sky is vast, but the airport is the only one, if you want to take off and land, you have to pay the fee. In this regard, the airline has almost no room for bargaining.

The question is, how can an airport that has always been "pampered" be involved in a price war? The author believes that this is the inevitable consequence of homogenous competition. Relevant information shows that the domestic airport investment scale will reach 140 billion yuan in the next five years, exceeding the total investment of the airport from 1990 to 2005. Obviously, the projects that have been launched have caused the airport to be too dense. Like Haikou Airport, since its opening in 1999, it has maintained a rapid growth momentum, but for the first time last year, passenger traffic fell. The Sanya Airport in Hainan Island has become the fastest airport in terms of passenger traffic in the country for several consecutive years, and its diversion effect on Haikou Airport has become more and more obvious.

In just one or two hours' drive distance, there are often two or three large airports, and new projects are waiting or have been started. This is the current situation of airport development in many areas in China. The subsidy war may only be the beginning. If the local governments continue to blindly launch the airport project and have not adopted appropriate dislocation competition measures, the scene of the airport price war may not be far behind.

Of course, for the airport, playing a price war may not be all bad. After all, the monopoly has been broken, and with competition, it is more motivated to work hard and strive for the upper class. Passengers will vote with their feet, so the airport can only improve the quality of service and try its best to attract tourists. Perhaps this is also an opportunity for domestic airport market competition.

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