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| Topic: |
Business
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| Number of pages / Number of words: |
7 / 1948 |
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Although high entry costs of aircraft acquisition and other capital requirements make entry difficult, the industry appears more contestable in the post-9/11era, as evidenced by the growth of low-fare carriers. These market entrants can erode a dominant carrier's market share, even at large hub airports...
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Unlike their larger competitors, several of these new market entrants are profitable and continue to experience growth (Walsh 2007).
The market power characteristics of price determination, product differentiation, economies of scale and contestability with low-cost competitors indicate that airlines are an inherently unstable industry, a problem typical of industries with high capital costs...
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