Economics: Cartel Case

THE CARTEL CASEIntroduction and Market Structure of the Airline IndustryThe airline persistence has been thriving with the onset of globalization and fast-developing business and social dealing among countries all oer the world . The movement of people and encumbrance , especially from one country to another , has been growing at such fast pace . The world has seemed to become a smaller place more so with the internet phenomenon massively increase exchanges among parties from all parts of the world thereby resulting to take off ahead of flights for commerce and tourism purposes . Through it all , with the exception of the yen lull brought about by the terrorists attack in bracing York City , USA , the airline companies have been reaping the goods of increase numbers of passengers and tidy sums of cargos . The followi ng table tabulates the increases from 2005 to 2006 in the number of passengers and RPKs of foursome major airlinesAirline Traffic Results 2006Airline Passengers (000 change 2006 / 20052006 RPKs (mil change 2006 / 2005 BA36 ,072 1 .6 114 ,841 3 .6VAA4 ,907 8 .6 35 ,279 9 .8AA98 ,200 0 .1 224 ,482 0 .8UA69 ,284 3 .7 189 ,098 2 .8Source : ATW Website (http /www .a bothnline .com /channels / informationAirlineEconomics /World_Airline_Re port_2006 .pdfWhereBA British AirwaysVAA Virgin Atlantic AirwaysAA Ameri stop AirlinesUA unify AirlinesData not availableCase Study OverviewWith the United States (US ) and the United earth (UK ) among the largest economies of the world , flights from one to the other and then bum atomic number 18 among the specific world flights with the biggest volume However , only quad airline companies - namely the British Airways , the Virgin Atlantic Airways , the American Airlines and the United Airlines - ar clear to fly their planes for transatlantic routes from capital of the United Kingdom s! Heathrow airdrome under the long-standing Bermuda Two Agreement which was signed by the British and American governments .

In addition , British Airways and American Airlines are the leading companies in the Oneworld International Airlines Alliance (Copyright 2006 freelancer Newss UK LimitedProvided by ProQuest entropy and Learning CompanyWithout a doubt , these four airlines have thereby been enjoying a big advantage over the other airlines operational in both US and UK . With the increasing trade- and tourism-related trips between these two countries and with just four airlines providing air loony toons for this specific portio n of the market , competition for the biggest share can be fierce . The following table shows the available entropy on fiscal results . It shows that , except for American Airlines whose figures were not include in the ATW data , operating profits are comparatively within chafe of these companies if only they efficiently control their costsThe airline companies have repair to passing on the burden of procession oil prices to the passengers this license has been granted to them by law . This is a great benefit for these companies it means that the profitability of their operations go forth not be adversely affected by the emergent apparent movement of fuel costs...If you want to get a honorable essay, revise it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay