China’s three large state-owned airline companies all reported huge drops in yearly profit. All claimed weak global economies, higher fuel prices and lower gains in foreign currency. Though they quickly point to the slow recovery in the US as well as the situation in Europe, the single greatest expense for these companies is fuel prices. Ironically, it is another state-owned company model (the monopoly) that raises prices higher than what some analysts believe an “open market” would allow.
This type of story is very interesting to me, because we see two different types of state-owned enterprises in two different monopoly sectors, one of which has a huge advantage. How do other state-owned sectors interact in China?