Browsing by Author "Williams, George"
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Item Open Access An analysis of China's liberalisation Policy with respect to international air transport(Cranfield University, 2010-12) Zhang, Bixiu; Williams, GeorgeInternational air transport is a commercial business by nature but carries a political significance. It has been regulated under the Chicago regime which requires the sovereignty governments to negotiate and determine how airlines engage in the transnational operations regardless of the market demand. Policy makers will have to take into account all factors, whether at international, domestic, institutional and individual levels, in determining to what extent the market should be liberalised so as to protect their national interest, optimise the opportunities for their industry and society as a whole, while at the same time promote competition and facilitate international trade. Despite the vast research that has been done on the liberalisation of international air transport as well as China‘s aviation policy and its industry, little is known about the considerations of Chinese government when formulating its international air transport policy, e.g. what are the variables that have influenced the country‘s policy making process that leads to the policy per se. The focus of the existing literature fails to treat China‘s international air transport policy as a subject matter for an objective and comprehensive analysis, but rather takes the policy itself as an external stimulus that drives the radical changes of the industry. Consequently, China‘s policymaking process with respect to international air transport remains a black box and its international behaviour is considered unpredictable. Applying the Micro-Macro Linkage Approach to three case studies, i.e. China-the US, China-the Netherlands and China-the UK markets, this research analyses China‘s liberalisation policy with respect to international air transport. By examining the data gathered through qualitative methods such as historical files and record, observations, and interviews with those who have participated in the process of policymaking and have been personally involved in bilateral air services negotiations, this research aims at identifying the factors that have had an impact on the country‘s policymaking process, establishing whether these factors are evolving over the years and determining how they are interacting with each other in leading to the policy outcome, hence, shedding light on the country‘s international trade policymaking and its international behaviour. The research has revealed that China‘s international air transport policymaking is both a top-down and bottom-up process with industry regulator being the primary initiator, formulator and administrator of the industry-specific liberalisation policy. Its decision making process has become more transparent, plural, open for and subject to both external and internal influences at all levels. International environment including international conventions, laws and regulations have formed a framework within which the country has to operate to develop its overall national policy. Bilateral political and economic relationship has played a pivotal role in shaping the country‘s policy on that specific country-pair market. Domestic considerations such as national interest, benefits to the society, industry and consumers as a whole are the fundamental concerns in determining the policy scope, i.e. to what extent the market should be liberalised and the pace of such liberalisation. Stakeholders are increasingly proactive in its involvement in the policymaking process in an attempt to influence the policy makers to their own optimal benefits. Institutions and personal characteristics do shape individual policy makers‘ mindset and perceptions but only to the extent of affecting the negotiation outcome on the bilateral country-pair markets. These factors have been evolving over the years and are time- and circumstance-constrained, namely, some factors may function at one occasion at a certain time but not necessarily at another. This research is a meaningful endeavour in attempting to understand China‘s policymaking process with respect to international air transport as an international trade in services, which has just received growing interest in both academia and industry practitioners in recent years. It will contribute to the knowledge of the study of China and the study of international air transport at large.Item Open Access Analysis of the effects of air transport liberalisation on the domestic market in Japan(Cranfield University, 2007-05) Miyoshi, Chikage; Williams, GeorgeThis study aims to demonstrate the different experiences in the Japanese domestic air transport market compared to those of the intra-EU market as a result of liberalisation along with the Slot allocations from 1997 to 2005 at Haneda (Tokyo international) airport and to identify the constraints for air transport liberalisation in Japan. The main contribution of this study is the identification of the structure of deregulated air transport market during the process of liberalisation using qualitative and quantitative techniques and the provision of an analytical approach to explain the constraints for liberalisation. Moreover, this research is considered original because the results of air transport liberalisation in Japan are verified and confirmed by Structural Equation Modelling, demonstrating the importance of each factor which affects the market. The Tokyo domestic routes were investigated as a major market in Japan in order to analyse the effects of liberalisation of air transport. The Tokyo routes market has seven prominent characteristics as follows: (1) high volume of demand, (2) influence of slots, (3) different features of each market category, (4) relatively low load factors, (5) significant market seasonality, (6) competition with high speed rail, and (7) high fares in the market. These characteristics particularly stand out when comparing to routes serving the UK, including UK domestics. Moreover, the outcomes of the analysis demonstrated the three significant different experiences compared to the intra-EU market serving the UK as a result of liberalisation: (1) decreased demand, (2) increased fares and (3) new entrants’ failures. Although competition among airlines seemed to be experienced in the beginning of the process of liberalisation, most of new entrants are governed by the control of network carriers, and this has affected the market, which resulted in fares to increase and demand to drop, particularly in the low demand markets. However, several markets on the Tokyo routes have been developed by low fares as a result of competition with high speed rail such as the Tokyo-Hiroshima and Okayama routes. The key objectives of the slot allocation policies were the promotion of competition and the improvement of consumer’s convenience with safety assured. They have not been accomplished yet because of several constraints. The constraints for liberalisation in Japan were discovered by comparing with the virtuous market flow circulation in the EU. The results of liberalisation in Japan have the opposite direction flow because airlines provide “high yield products”, which are caused by high cost structures of air transport in Japan, compared to the “high productivity products” of the EU. It is very difficult to promote a real basis for competition among airlines and HSR in Japan. Governments have been developing the transportation network of both rail and air in line with the growth of the Japanese economy under the name of competition policy since 1960s. The overestimated airport planning and demand by the government based on the bubble economy in Japan caused high cost structures as well. Furthermore, the Japanese Government has been reluctant to implement significant changes and face the impacts of deregulation in order to avoid the bankruptcies of airlines experienced in other liberalised markets. Therefore, the intensity of competition in the Japanese air transport has been interpreted and implemented differently from those of other areas as a result of this protective policy towards Japanese airlines. The standard of competition has not reached the level of other industries like manufacturing, which have been competing in the global market. It seems that Japanese government policy has accomplished its objective which forced two network carriers (JAL and ANA) to change the structure of organisations, labour cost and their companies’ hierarchical cultures, although the intensity of change is not enough compared with other airlines outside Japan as a result of liberalisation. Lower fares and reduced costs are crucial in order to develop demand and switch the direction of the market flow in Japan, as evidenced in the intra-EU market. A real basis for competition is expected when the number of slots will increase at Haneda airport in 2009. In order to prepare for the next step of liberalisation and international competition, fundamental changes and innovation should be implemented by removing constraints in the Japanese air transport system.Item Open Access A comparative analysis of the application and use of public service obligations in air transport within the EU(Elsevier, 2004-01) Williams, George; Pagliari, RomanoThe paper seeks to compare and contrast how different EEA (European Economic Area member states have adopted and made use of the public service obligation (PSO mechanism in air transport. Analysis shows that there is considerable variation in the extent and way in which various countries have adopted the PSO mechanism. Some countries, such as France, the Irish Republic and Norway, have made extensive use of PSOs on their domestic scheduled air services networks. This is in contrast to the approach adopted in the United Kingdom, where a number of lifeline air services are vulnerable to potentially adverse airline pricing and output decisions. This suggests that there are major inconsistencies in the approach and commitment to social air services provision across the European Union which may undermine broader policy initiatives designed to enhance mobility and accessibility.Item Open Access Establishing an effective economic regulatory policy for the European airline industry(1990-06) Williams, George; Hofton, A. N.Unfettered competition in the US and Canada has resulted in a much more efficient airline industry, but the considerable economies derived from the resulting structural change has lead to greater levels of concentration than previously existed. Arguments postulated in the early 1980!s concerning the contestability of airline markets have been clearly shown to be erroneous. Megacarriers now have substantial power which they use to organise and manipulate their markets in order to extract economic rent and restrain potential rivals. Wresting organisational control from an increasingly powerful group of carriers in order to obtain a more equitable distribution of the benefits that deregulation has brought will be both expensive and highly controversial. In Europe similar opportunities exist for efficiency gains, but here it should be possible to achieve these without having to hand over market control to powerful airlines. In order to do this however a considerable reorientation and modification of existing regulatory policy is required. The priority of protecting producers' interests by limiting the competitive pressures they face is no longer warranted. Sustaining competition should now form the primary concern of regulators. The adoption of a system of route franchising with carriers being forced periodically to compete for licences provides a means by which this could be achieved.Item Open Access Passengers’ perceptions of low cost airlines and full service carriers: a case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines(Elsevier, 2005-07-01T00:00:00Z) O'Connell, John F.; Williams, GeorgeDirect competition between full service airlines and no-frills carriers is intensifying across the world. US and European full service airlines have lost a significant proportion of their passengers to low cost carriers, the experience now being repeated in the domestic markets of Asia. This paper attempts to provide answers to a number of critical questions: What are the key drivers of each type of airline's business model? Is there a difference in passengers’ perceptions between low cost carriers and full service incumbents in a mature European market and in a rapidly developing Asian economy? What are the principle reasons why a passenger chooses a particular airline model? How could a legacy carrier encourage passengers to return and so regain their domestic market share? These questions are addressed using information obtained in passenger surveys that were recently conducted in Europe and Asia.Item Open Access The strategic response of full service airlines to the low cost carrier threat and the perception of passengers to each type of carrier(Cranfield University, 2007-05) O'Connell, John F.; Williams, GeorgeLow cost carriers have changed the competitive dynamics of the short-haul market forever. They have revolutionised the way of doing business in aviation by adopting a fresh approach on both strategic and operational issues. Simplicity has become their universal principle over network airlines and subsequently they have achieved substantial cost advantages which are passed onto the consumer as lower fares. Network airlines have found it difficult to reshape their structural barriers and have been slow to incorporate the components that low cost carriers deemed very significant in impacting their operating margins. However, a restructuring of their internal weaknesses should spur initiatives to design long-term strategies to address those shortcomings. Network airlines rely on producing value-adding and consumerdriven product differentiation beyond the basics of the low cost carrier product. To further differentiate themselves network airlines need to focus on: customer satisfaction; develop long term mutually beneficial relationships with both passengers and corporations; collaborate with a wide range of bipartisan partners; retain differentiated flight products that add value; and to incorporate strategies that other network carriers deemed paradigmatic. Network carriers should resist reducing costs associated with value-added services and need to become innovative in generating alternative revenue streams.Item Open Access Transformation of India's Domestic Airlines: A case study of Indian Airlines, Jet Airways, Air Sahara and Air Deccan(Elsevier Science B.V., Amsterdam., 2006-11-01T00:00:00Z) O'Connell, John F.; Williams, GeorgeIndia, home to one-sixth of the world's population, is becoming one of the world's economic engines. Its bureaucratic and outdated regulatory policies have been reformed resulting in a three-fold increase in the number of scheduled airlines and a five-fold increase in the number of aircraft operated. This paper reviews how the new regulatory roadmap has transformed the supply of domestic air services. A large passenger survey conducted in Mumbai investigated the sensitivity of passengers to a change in fare and which flight products would encourage them to select either a full service airline or a low cost carrier. The study finds that there is a homogenous set of flight products required by leisure passengers, travelling on both full service and low cost airlines, however there is a considerable dissimilarity overall between the requirements of passengers using a full service airline and a low cost carrier.