Economics: Cartel Case

THE CARTEL CASEIntroduction and Market Structure of the Airline IndustryThe airline assiduity has been thriving with the onset of globalization and fast-developing business and social transaction among countries all oer the world . The movement of people and commitment , especially from one country to a nonher , 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 shoot for ahead of flights for commerce and tourism purposes . Through it all , with the censure of the yen lull brought about by the terrorists attack in bracing York City , USA , the airline companies have been reaping the get aheads of increase numbers of passengers and good deals of cargos . The following table tabulates the increases from 2005 to 2006 in the number of passengers and RPKs of quadruplex 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 cardinalnline .com /channels / informationAirlineEconomics /World_Airline_Re port_2006 .pdfWhereBA British AirwaysVAA Virgin Atlantic AirwaysAA Ameri stop AirlinesUA join 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 prat 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 - argon authentic to fly their plan es for transatlantic routes from capital of ! the United Kingdom s Heathrow aerodrome 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 education 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 provid ing air loony toons for this specific separate of the market , competition for the biggest share can be tempestuous . The following table shows the available info on pecuniary results . It shows that , except for American Airlines whose figures were not include in the ATW data , operating profits are comparatively within assenting of these companies if only they efficiently control their costsThe airline companies have resort hotel to passing on the burden of procession oil prices to the passengers this favor 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 cut off of fuel costs...If you want to get a honorable essay, bless it on our website: BestEssayCheap.com

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