| dc.description.abstract | Due to politic reasons, the Cross-Strait airline business between Mainland China and Taiwan has been delayed, and the carriers of Taiwan have found they might gradually lose their opportunity to enter and expand their business in China’s booming cargo market. However, both of the Taiwanese international carriers have found their way entering the Shanghai Air Cargo market, at least indirectly. Two different strategies were selected by the two carriers to enter the Shanghai market. Through the comparison of the strategies adopted by the two carriers, this study tried to understand the suitable strategy for Taiwanese carriers to enter the China market. Future possible strategies for entering the China market were proposed.
In this study, we found the new-invested industry from Taiwan to Mainland China was structurally changed. Specifically, the firms making new investments in China from Taiwan were changed from small- and medium-sized companies to large public companies, and the location also moved from the Pearl River Triangle Area to the Yangtze River Triangle Area. As a result, the shortage of Air Cargo space in Shanghai area has become the most critical problem for the industries in the area. Also, China gradually allowed the foreign carriers to have the Fifth Freedom to operate in the China Cargo market. Taiwan’s carriers therefore must enter this market before the direct link agreement between the two sides. Currently, the only way to enter the China Market was to establish strategic alliance with one of the China’s carriers.
Comparing the types of strategic alliance selected by the two studied carriers, we applied the stability matrix of airline alliance study and the key success factors to check the stability of both alliances and their dynamic characteristics. The general conclusion is that higher resource input and lower complexity involvement tend to provide relatively higher stability for airline alliances.
The finding and the suggestion of the study are as follows. Complete the cross-strait agreement between the two sides as soon as possible. Taiwan-based carriers could use their large capacity and experienced operational skills to enter the China market to provide good service to match its strong demand for air cargo. Chinese carriers prefer to have partnership with Taiwanese carriers so as to learn the know-how and skill of air cargo business. Strategic alliance is the best way for Chinese carriers to easily learn the core know-how and skill to operate in the air cargo market. Taiwan government has to reconsider the competition between Hong Kong CLK airport and Taiwan CKS airport. The Cross-strait service could let CKS easily replace CLK’s position to be the cargo transfer center between China and USA. In the future, the logistic services for global supply chains will be more important due to the industrial position of China. Taiwanese carriers could enter China quickly and link with their existing cargo service net. Based on the geographical advantage of Taiwan, Taiwan government could consider improving the air cargo service at the CKS airport in order to replace Hong Kong and link directly with the three major gateways in China. Strategically, Taiwan could maintain its competitiveness in the transportation business and be a large cargo hub in Asia. | en_US |