Low-cost carriers have experienced a rapid rise in the global market and continue to erode the market share of traditional airlines. LCCs in Asia enjoy clear advantages in Southeast and South Asian markets while North Asia and Southwest Pacific lags behind, and LCCs have targeted Northeast Asia, particularly China, as an important development strategy. By the end of 2014, 15 Asian LCCs had entered China, covering 28 cities nationwide. The tide of LCCs is rising and further intensifying competition in the domestic market.

Air China enjoys a quite different target market and flight networks from that of LCC. But in response to this competition, Air China still will on one hand strive to reduce unit costs, improve aircraft utilization rates, increase seating arrangements, enhance the proportion of direct sales, and improve labor efficiency. While on the other hand, will adjust the non-hub route business model and match different products and services together so as to increase efficiency and reduce costs.