Australian Airline Oligopoly

Most of these are benefits that competing airlines offer, but one benefit stands out. American Airlines pass travel program is a benefit that many do not tend to overlook. American do... ... middle of paper ... ...f these programs, and allows them to offer these strategic benefits. We feel that American and Continental Airlines are overlooking an important strategic hiring strategy, by not offering free flights to all their employees, since cost of flights are fixed. For example, a flight that is only at 85% capacity will fly for the same price as a flight that is at 100% capacity.

Also, since barriers to entry are high, firm can earn super normal profit in the long run. Also the firms in oligopoly are Price setter, and not Price takers. Since there are very few firms, or few firms with large share, the action of one firm can have an impact on other. These types of firm often compete on other things like advertising, schemes, discount, service rather than price. The Indian Airline Industry is an Oligopoly because of having the above mentioned features in it, which we will be explaining in detail.

It’s not just about getting from A to B. It’s about what are you going to get for that price (Bachman, Justin, 2013) ?” Like most airlines Delta airlines utilize the most efficient ways of advertising to get the “word out”. Get the “word out” is not a issue for today’s society, its more about how well that “word out” is portrayed to the customer. Delta airlines follows the “4 P”’s of marketing Product Price, Promotion, and Place to market its service. When advertising service several factors determine the price and demand of the service, which involve economic and cultural factors as well as other airline competition. Selling the airline product is not easy, as it is almost like a military recruiter selling th... ... middle of paper ... ...y 16).

medium scale Air Asia has strategically implement the LCC Airline to earn huge number of travels. ‘’low income market presents a prodigious opportunity for the world’s wealthiest companies to seek their fortunes and bring prosperity to the aspiring poor.’’ (Prahalad, 2002 (Prahalad, C.K, Hart, L.S (2002) The Fortune at the Bottom of the Pyramid, Strategy +Business, 26 pp1-14) Corporate Strategy Option Ansoff Matrix, with context to Air Asia looks in the growth and expansion of the company

Ryanair’s 8.8. Furthermore, the load factor of EasyJet’s planes is 91.7% vs Ryanair’s 82.7%. Although Ryanair’s strategy is heavily dependent on economies of scale, it fails to outperform its main competitor in this area – EasyJet’s learning curve has steeper slope compared to that of Ryanair. In conclusion, there are some similarities between Ryanair’s and EasyJet’s strategy, but there are also significant differences. As Chris Zook suggests in his book ‘Profit from the Core’, a “sustained and profitable growth requires a strong, well-defined core”2.

A perfect competition and a monopoly are two very different and unique market structures. Under monopolies firms get normal profits only in the short period, but disappears in the long run. Monopolies come with strong barriers to enter and exit the market. Under a monopoly, a monopolist can charge different prices and no one can complain because everything is being ran by one big business. In a monopoly the average revenue curve slopes downward, and the demand curve is very inelastic.

The SARS virus has had an effect on the number of passengers travelling to the very east of the world. 1 Charter flights are also in a volatile market and are affected by events such as: 1. the general economic conditions 2. foreign currency exchange rates 3. consumer confidence I tour operators 4. competitor activities 5. trades towards off-season holidays 6. weather conditions 1 the Airport must comply with regulations and legislation which is subject to change, for example: 1. The establishment of a single market within the Euro... ... middle of paper ... ...atement, which indicates the broad methodology used and is titled Basis of Opinion. Statement of According Policies Principles of accounting policies are declared in this statement. Details are provided of particular accounting methods used such as description.

With banked hubs, assets sometimes remain unused for extended... ... middle of paper ... ... paid and unpaid seats, to determine the average amount of revenue received for a paid seat we calculate revenue per revenue passenger mile (RRPM). Break-even analysis is an important measurement for a company. It is the number of revenue (or unit) required in order for the company’s costs to be recovered. In the airline industry, break-even called break-even load factor and is usually expressed as a percentage of total ASMs. With break-even load factor, any actual load factor greater than break-even is a positive contribution and any load factor less than break-even is a loss.

v. Threats from Buyers As compare to suppliers’ power in airline industry threats from buyers are not of great significance. Airlines have reduced buyers’ power through using competitive pricing and customer switching as a tool. According to Burkart (1962) the intention of these competitive pricing policies by the scheduled operators has been to deter new entrants to such routes. In National Economic Research and Discussion paper (April 2003) says that … switching costs are created by loyalty programs designed … such as frequent flyer or corporate discount schemes. These programs create both intertemporal switching costs (as they create benefits for the consumer in using the same airline for the same route in different time periods) and also shopping costs (as they create benefits for using the same airline for different routes in the same time period).

With negligible switching costs, budget airlines pose a threat. However, airlines defend themselves by differentiating their services or forming strategic code sharing alliances with other airlines A strategic partnership that Emirates stroke with Qantas airlines in 2013 gives the airline a distinct advantage over other Middle Eastern airlines. The partnership will see Emirates passenger load factor increase, with 200 destinations in six continents offered to its customers. What keeps the competition high are the low switching costs from one service provider to another. Pricing Emirates Airlines prices its services slightly above its competitors.