ECONOMIC CHARACTERISTICS OF AIRLINES
Oligopolist market structure
- Few firms producing similar or differentiated products
- Characteristics of Oligopolies
- Barriers to entry
- Capital requirements, technical know-how, patent rights
- Economics of scale
- Reduced long term average costs for low unit costs
- Survival of the fittest
- Growth through merger
- Increase in market share
- Consolidation of resources
- Mutual Dependence
- Rivals behavior matters a lot
- Price rigidity and non-price competition
- Price reduction only due to low demand or extra capacity