Organizational learning, operating costs and airline consolidation policy in the Chinese airline industry

Clement Kong Wing Chow and Wai Hong Kan Tsui

Journal of Air Transport Management, 2017, vol. 63, issue C, 108-118

Abstract: This study investigated and reviewed organizational learning in the Chinese airline industry, which is dominated by state-owned or state-controlled airlines. This empirical research focused on the extensive scale of airline mergers and acquisitions among 12 Chinese airlines for the period of 1996–2014. This research aims to make a contribution towards addressing the general lack of academic reflection on the impact of organizational learning on airline performance during and after the completion of mergers and acquisitions. The empirical findings of this paper suggested that there was, in general, organizational learning experienced by Chinese airlines from their prior operating experience in improving operating costs. However, airline mergers in 2001/02 increased airlines' average operating costs, as most state-owned airlines are notorious for poor cost management. Significantly, the performance improvement among Chinese airlines was found during the post-merger periods in this study, and the increase in Chinese airlines’ operating costs during the post-acquisition periods due to the limited integration of 2010 acquisition compared with the 2001/02 mergers.

Keywords: Organizational learning; Operating experience; Operating costs; Airline mergers and acquisitions; Post-merger periods; Post-acquisition periods (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:63:y:2017:i:c:p:108-118

DOI: 10.1016/j.jairtraman.2017.06.018

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