Discussion 5
- Describe globalization as it applies to the airline industry. Why is it so difficult for U.S. carriers to establish hubs outside the United States?
- Why are bilateral agreements between the United States and many foreign countries to the disadvantage of U.S. carriers?
- How would an open-sky agreement improve this situation?
- Describe how code-sharing agreements operate. What is the impact on competition? How does the airline industry differ from other industries with regard to globalization?
Discussion 6
- Describe the role of the major and national carriers. Identify some of the carriers in each category.
- How did the regional carriers get started?
- Describe a typical regional carrier in terms of its role in the air transportation system, type of aircraft flown, and route structure.
- What is meant by hub-and-spoke network?
- Why has the number of regional carriers declined since deregulation?
- Describe some of the changes that have taken place in this segment of the industry. What is code sharing?
Discussion 7
- Why do you think that air carriers are so mutually dependent?
- How have pricing practices changed since the prederegulation days?
- What was the major form of competition in the prederegulation era? Discuss some of the causes of the price wars in the 1980s.
- Do you foresee prices stabilizing in the next several years?
- Why is there a tendency in oligopolistic industries toward price rigidity and nonprice competition?
