In order to insight into the characteristics of Shanghai domestic air passenger market, four market segments is divided according to airline annual passenger flow, which are express market, large passenger flow market, medium passenger flow market and low passenger market. Meanwhile, this paper has a quantitative analysis of each market segment on the term of the overall size, aircraft type matching and the benefits. The results showed that the express market is a well-developed and its demand tends to be intensive. The scale of the large passenger flow market and the medium passenger flow market is rising rapidly but small. The low passenger market is potential. Finally, some suggests are provided to the airlines who intend to enter ShangHai air passenger market.