| Summary: | China's air transport industry has grown dramatically in recent years. In general, industries with fast-growing demand are highly profitable. However, this is not the case with airlines, which usually less profitable (Doganis 2010). In order to improve their profitability, airlines need to improve their current cost management system. Strategic cost management is an effective method, which is conducive to forming a competitive advantage (Ellerand and Moreira 2014).
As the pioneer of low-cost Chinese airlines, the cost management model of Spring Airlines is representative. By studying the practical application of strategic cost management based on the value chain in Spring Airlines, the following conclusions are made: 1) The role of the value chain is significant, and the unit cost of Spring Airlines is at a lower level. 2) Low-cost airlines can establish cooperative relationships with upstream and downstream enterprises, optimise internal value chains, and gain strategic alliances with competitors to effectively control costs and gain competitive advantages.
Keywords: Value Chain; Strategic cost management; Competitive advantage; Airlines
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