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Author: Peter Forsyth Publisher: Routledge ISBN: 1351161385 Category : Business & Economics Languages : en Pages : 516
Book Description
Prior to liberalization, there was little scope for predatory behaviour in the aviation market. However, following deregulation, new entrants sought to compete with entrenched incumbents. Low-cost carriers (LCCs) gained significant market share, which in turn provoked many different kinds of defensive response. Having put pressure on established carriers, low-cost airlines are themselves feeling the pressure of competition from new operators. While it is normal and natural for airlines to react to competition - modifying their services, the ways in which they offer them and their prices - when does aggressive commercial behaviour go too far and become predation? This book considers what exactly is meant by 'predation' in the aviation environment, and explores the strategies LCCs adopt in order to gain market share, as well as the strategies of the established airlines in response to competition from new entrants to the market. It also addresses the key question of what competition policy should do to ensure intensive competition. Competition versus Predation in Aviation Markets brings together contributions from around the world, from airlines, government agencies, leading academics and consultants, providing a wealth of perspectives on a business practice crucial to airline survival.
Author: Peter Forsyth Publisher: Routledge ISBN: 1351161385 Category : Business & Economics Languages : en Pages : 516
Book Description
Prior to liberalization, there was little scope for predatory behaviour in the aviation market. However, following deregulation, new entrants sought to compete with entrenched incumbents. Low-cost carriers (LCCs) gained significant market share, which in turn provoked many different kinds of defensive response. Having put pressure on established carriers, low-cost airlines are themselves feeling the pressure of competition from new operators. While it is normal and natural for airlines to react to competition - modifying their services, the ways in which they offer them and their prices - when does aggressive commercial behaviour go too far and become predation? This book considers what exactly is meant by 'predation' in the aviation environment, and explores the strategies LCCs adopt in order to gain market share, as well as the strategies of the established airlines in response to competition from new entrants to the market. It also addresses the key question of what competition policy should do to ensure intensive competition. Competition versus Predation in Aviation Markets brings together contributions from around the world, from airlines, government agencies, leading academics and consultants, providing a wealth of perspectives on a business practice crucial to airline survival.
Author: Peter Forsyth Publisher: ISBN: 9781351161404 Category : Electronic books Languages : en Pages :
Book Description
"Prior to liberalization, there was little scope for predatory behaviour in the aviation market. However, following deregulation, new entrants sought to compete with entrenched incumbents. Low-cost carriers (LCCs) gained significant market share, which in turn provoked many different kinds of defensive response. Having put pressure on established carriers, low-cost airlines are themselves feeling the pressure of competition from new operators. While it is normal and natural for airlines to react to competition - modifying their services, the ways in which they offer them and their prices - when does aggressive commercial behaviour go too far and become predation? This book considers what exactly is meant by 'predation' in the aviation environment, and explores the strategies LCCs adopt in order to gain market share, as well as the strategies of the established airlines in response to competition from new entrants to the market. It also addresses the key question of what competition policy should do to ensure intensive competition. Competition versus Predation in Aviation Markets brings together contributions from around the world, from airlines, government agencies, leading academics and consultants, providing a wealth of perspectives on a business practice crucial to airline survival."--Provided by publisher.
Author: Paul Stephen Dempsey Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
Though the early 1990s brought about a proliferation of new entrant airlines, the late 1990s was an era of bankruptcies, liquidations and retrenchments for upstart airlines. Five new airlines per year emerged from 1990 to 1995. But from 1995 until early 1999, not a single new airline began service. New entrants like Air South, Pan Am (which included Carnival Airlines), Western Pacific, Kiwi, and Sun Jet International fell into bankruptcy, while others were facing enormous financial difficulty. By 1999, new entrants accounted for only 1.3% of the total market. While hub concentration was growing, competitive service declined 28% in city-pairs between 1994 and 1999. Several new entrant airlines came together in 1996 to form the Air Carrier Association of America. The Air Carrier Association of America was initially formed to deal with the effort of the major airlines to shift the excise tax burden away from the largest airlines and onto the smaller, affordable airlines. But as they came together, the new entrants learned they had something else in common. The major airlines appeared to be on a homicidal mission to destroy the low-fare airlines. The window of opportunity opened after the ValuJet catastrophe in the Everglades, in May of 1996. The U.S. Department of Transportation [DOT] had been a champion of the competition brought to bear by the new entrant airlines, praising their annual $6 billion contribution to consumer savings as a clear success of deregulation. But the Everglades crash occurred in an election year, and for political reasons, DOT soon found itself neutralized. The Federal Aviation Administration grounded ValuJet's 53 aircraft. The question in the industry became, "Why did Delta allow ValuJet to grow so large? Why didn't Delta kill off ValuJet when it had the chance?" According to the new entrants, that mind-set put a number of relatively smaller airlines in the cross hairs of the majors. For example, the world's largest airline, United, allegedly targeted Frontier and Western Pacific. American allegedly set its sights on Vanguard, Western Pacific, and Sunjet International. Delta allegedly targeted Valujet. Northwest allegedly targeted Sun Country and Spirit Airlines. By 2002, Western Pacific, Vanguard, SunJet International, Sun Country and Spirit had either been driven from the market or driven into bankruptcy. Though the DOT had earlier been able to dissuade predation by 'jaw-boning' the major airlines into engaging in responsible competitive behavior (by persuading Northwest and Delta to back off of their below-cost pricing and capacity dumping in markets entered by Reno and ValuJet, respectively), such moral persuasion no longer worked. Low-fare new entrant airlines complained that the major airlines engage in below-cost pricing and capacity-dumping when a small affordable air carrier enters the markets they dominate, particularly when one dares to provide competition at their "Fortress Hubs." They alleged that pricing and capacity are not the only predatory weapons in the arsenal of the major airlines. Predatory behavior designed to suppress competition takes many forms. According to the new entrants, capacity dumping and below cost pricing were essential foundations of this campaign to eradicate competition. In each situation, the tactics differed somewhat, but the alleged purpose was the same-destroy the affordable airlines so as to raise consumer prices. This essay is divided into six broad sections: 1. The first is the introduction. 2. In the second, we examine the empirical evidence of predatory conduct. We examine how major airlines behave in three scenarios: ( 1) major airline vs. major airline; (2) major airline vs. Southwest Airlines; and (3) major airline vs. small low-cost/ low-fare airline. It is in the third category that we see the most flagrant instances of predatory conduct. 3. In the third section we develop a case study to examine the efforts of the world's largest airline to monopolize one of the world's largest airports. 4. The fourth section of this essay provides a legal analysis of capacity dumping, pricing discrimination, predatory pricing, monopoly leveraging, refusing to deal, refusing to share an essential facility, raising rivals' costs, and exclusive dealing arrangements. That analysis is heavily grounded in Sherman and Clayton Act applications, for the case law is well developed there, and the competition laws in the Federal Aviation Act have largely lain dormant for the two decades of deregulation. While the "unfair or deceptive practice" or "unfair method of competition" provisions of the Federal Aviation Act are not constrained by Sherman and Clayton Act interpretations, nonetheless the DOT is free to apply analogous standards to its interpretation of the Federal Aviation Act. Moreover, as explained below, many of the predatory practices of the major airlines may offend all three statutes. 5. In the concluding section, we address the policy dimensions of enhanced governmental oversight and enforcement of predatory behavior by large incumbent airlines against new entrants.
Author: David Starkie Publisher: Ashgate Publishing, Ltd. ISBN: 9780754673880 Category : Transportation Languages : en Pages : 252
Book Description
This volume is a collection of 17 papers selected from David Starkie's extensive writings over the last 25 years. Previously published material has been extensively edited and adapted and combined with new material, published here for the first time. The book is divided into five sections, each featuring an original overview chapter, to better establish the background and also explain the papers' wider significance including, wherever appropriate, their relevance to current policy issues. These papers have been selected to illustrate a significant theme that has been relatively neglected thus far in both aviation and industrial economics: the role of the market and its interplay with the development of economic policy in the context of a dynamic but partly price regulated industry. The result provides a strong flavour of how market mechanisms, and particularly competition, can operate to successfully resolve policy issues.
Author: Paul Stephen Dempsey Publisher: Routledge ISBN: 1315297760 Category : Law Languages : en Pages : 374
Book Description
The Routledge Handbook of Public Aviation Law is the first book to incorporate a comprehensive analysis of Public Aviation Law – principally international, but also domestic law in a comparative context – in a single volume. International Law is pervasive in Aviation Law, and is incorporated into a number of major multilateral treaties (e.g., the Chicago Convention of 1944, for Public International Air Law). This is supplemented by various Annexes (promulgated by the International Civil Aviation Organization) and Conventions and Protocols (promulgated by States in diplomatic conferences). States then implement these international obligations in domestic laws that create aviation regulatory administrations that, in turn, promulgate regulations. Bringing together leading scholars in the field, this prestigious reference work provides a comprehensive and comparative overview of Public Aviation Law. It surveys the state of the discipline including contemporary and emerging areas of law, regulation, and public policy in air transportation. Each chapter begins with an overview of the international law applicable to the subject matter, followed, where appropriate, by a comparative examination of domestic statutes, regulations, and jurisprudence. The objective of the book is to identify and summarize existing areas within the context of international research, and to identify and highlight emerging areas. Both practical and theoretical in scope, the Routledge Handbook of Public Aviation Law will be of great relevance to scholars, researchers, lawyers, and policy makers with an interest in aviation law.
Author: Steven Truxal Publisher: Routledge ISBN: 1136315330 Category : Law Languages : en Pages : 210
Book Description
An examination of the relationship between competition and the deregulation and liberalisation of the US and European air transport sectors reveals that the structure of the air transport sector has undergone a number of significant changes. A growing number of airlines are entering into horizontal and vertical cooperative arrangements and integration including franchising, codeshare agreements, alliances, ‘virtual mergers’ and in some cases, mergers with other airlines, groups of airlines or other complementary lines of business such as airports. This book considers the current legal issues affecting the air transport sector incorporating recent developments in the industry, including the end of certain exemptions from EU competition rules, the effect of the EU-US Open Skies Agreement, the accession of new EU Member States and the Lisbon Treaty. The book explores the differing European and US regulatory approaches to the changes in the industry and examines how airlines have remained economically efficient in what is perceived as a complex and confused regulatory environment. Competition and Regulation in the Airline Industry will be of particular interest to academics and students of competition law as well as EU law.
Author: Stephen Holloway Publisher: Routledge ISBN: 1317049659 Category : Business & Economics Languages : en Pages : 845
Book Description
This third edition of Straight and Level thoroughly updates the previous edition with extensive comments on recent industry developments and emerging business models. The discussion is illustrated by current examples drawn from all sectors of the industry and every region of the world. The fundamental structure of earlier editions, now widely used as a framework for air transport management courses, nonetheless remains unchanged. Part 1 of the book provides a strategic context within which to consider the industry's economics. Part 2 is built around a simple yet powerful model that relates operating revenue to operating cost; it examines the most important elements in demand and traffic, price and yield, output and unit cost. Part 3 probes more deeply into three critical aspects of capacity management: network management; fleet management; and revenue management. Part 4 concludes the book by exploring relationships between unit revenue, unit cost, yield, and load factor. Straight and Level has been written primarily for masters-level students on aviation management courses. The book should also be useful to final year undergraduates wanting to prepare for more advanced study. Amongst practitioners, it will appeal to established managers moving from functional posts into general management. More broadly, anyone with knowledge of the airline industry who wants to gain a deeper understanding of its economics at a practical level and an insight into the reasons for its financial volatility should find the book of interest.
Author: Pat Hanlon Publisher: Routledge ISBN: 1136400745 Category : Business & Economics Languages : en Pages : 388
Book Description
Global Airlines: Competition in a Transnational Industry presents an overview of the changing scene in air transport covering current issues such as security, no frills airlines, ‘open skies’ agreements, the outcome of the recent downturn in economic activity and the emergence of transnational airlines, and takes a forward looking view of these challenges for the industry. Since the publication of the second edition in 1999 major changes have occurred in the industry. The ‘rules of the game’ in air transport are now beginning to change; and it is time to take the story forward. This third edition contains nine new chapters and tackles the following issues amongst others: * Security: The tragic events of 11 September 2001, followed by the war in Iraq, and the resultant heightened tensions over security and passenger safety. * Financial instability: the cyclical downturn in economic activity has led some airlines to the verge of bankruptcy. Even some large well-established carriers are not immune from this. How can the industry look to survive? * Attaining global reach: implications of transborder mergers, open skies agreements and the transatlantic Common Aviation area. Can full globalisation ever be reached? * Low-cost carriers and e-commerce: as both increase, how much the industry re-structure and deal with issues associated with increased passenger traffic and decreased labour requirements? * Airport capacity: Air traffic is estimated to grow at a long-term average annual rate of 5 per cent per annum. But many airports in many parts of the world are already reaching their capacity limits. How can this be overcome and are the environmental implications? Using up to date data and case studies from major international airlines such as United Airlines, British Airways, and Qantas amongst many others, Global Airlines provides a comprehensive insight into today’s global airline industry.
Author: Peter Forsyth
Author: Peter Forsyth
Author: Peter Forsyth
Author: Paul Stephen Dempsey
Author: David Starkie
Author: Paul Stephen Dempsey
Author: D. N. M. Starkie
Author: Steven Truxal
Author: Stephen Holloway
Author: Sven Gross
Author: Pat Hanlon