Since deregulation, start-ups come and go. Big airlines seem to survive on the basis
of the monopoly power they derive from their terminal slots at major airports.
Otherwise airlines might be the classic case of a declining cost industry with few
barriers to entry making it impossible for anyone to stay in business for long since
competition will tend to drive prices down to marginal cost < total cost ... -- Bill
Dickens
William T. Dickens
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Phone: (202) 797-6113
FAX: (202) 797-6181
E-MAIL: [EMAIL PROTECTED]
AOL IM: wtdickens
>>> [EMAIL PROTECTED] 01/16/01 08:52PM >>>
Why do airline firms exist?
Seriously, given the unpredictable nature of the airline industry such
as disasters, bad weather, labor strikes and regulation you would
think almost no one could survive in such a wacky business environment.
I know that some firms tend to make profits (like Southwest) but
even in booming times, most airlines seem to live on indefinite
credit lines.
any insight by people in the know?
-fabio
