Measuring the effects of China’s airline mergers on the productivity of state-owned carriers

This paper studies the impact of mergers between Chinese airlines on the productivity of state-owned carriers. The results show that there are improvements in productivity along with technical changes. Among the big three airline groups, Air China and China Southern Airlines have benefited significantly from the mergers but there has been little change in the productivity of China Eastern Airlines. In addition, medium sized state-owned airlines such as Sichuan Airlines, Shanghai Airlines and Shenzhen Airlines are also beneficiaries of this consolidation policy.

► We study the impact of state initiated mergers on the productivity of state carriers. ► We find improvements in the technical changes of state carriers after mergers. ► There is also a slight reduction in the efficiency changes. ► Air China and China Southern Airlines have benefited significantly from the mergers. ► There is little change in the productivity of China Eastern Airlines.