Airline Oligopoly

The airline business has been effected severely by the Obama administration. The administration allowed for many of the businesses to merge together in order for the airline business to be made up of 4 primary airlines. Continental was taken over by United, American was taken over by US Airways, and Delta took over Northwest. Due to the merging of these companies, an oligopoly was formed between the 4 primary airlines. This lead to many issues such as a decline in customer satisfaction. New fees appeared, seats became less comfortable, leg room room disappeared, and higher fares appeared. In the future, the airline oligopoly is only predicted to become stronger. Virgin America would be the deciding factor if the airline were to be taken over by one of the primary 4. With more companies there is higher competition. This leads to a higher incentive for companies to create the most quality experience for their consumers. However, due to the oligopoly, there is way less competition and therefore less incentive for companies to attempt and outperform their competitors. Conclusively, the oligopoly in the airline business can only lead to less and less desirable flying experiences.

 

http://www.americanthinker.com/blog/2016/04/fasten_your_seatbelts_deeper_airline_oligopoly_ahead.html

2 Comments »

  1. messersn Said,

    December 12, 2016 @ 10:11 pm

    This is an interesting article. I think that this is actually a relatively serious problem within this specific industry. Even though it may seem like there are so many airlines choose from, there are actually just a few people controlling each individual airline, and those few people take advantage of their power in order to increase their profits, and reduce customer satisfaction.

  2. saltzbej Said,

    December 14, 2016 @ 3:34 am

    As much as I agree with you, Southwest airlines is still a major player in the market, and I think that they’re taking advantage of these falling satisfaction rates by offering everything the other airlines aren’t. Southwest has no bag fees, allows you to choose your seats, and has no change fees for flights. Even though they only fly domestically, they’re becoming one of the leading airlines, and I think they will become more successful in the coming years.

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