Comparative Data of the Airline Industry

Question 1
Journalist James B Stewart explained the oligopoly like the arrangement between the US Airline
Carriers with the help of a term called “discipline.” This discipline is imposed by the summit
body of Airlines Carriers. James presented comparative data of the Airline industry, four major
operators and are sharing a load of 80 percent traffic and controlling the pricing structures and
other service standards (Stewart, 2015).
In the past, the regulatory authority of the USA came up with some arrangement to ensure an
optimum load on each airline to create a perfect competition market for the benefits of the
customers. However, the giants in the market are striking mergers and other informal
arrangements (hidden cartels) to restrict the choices of the customers. For instance, they are
hiding the fare structures from the customers and deliberately aborting the services on certain
routes to support the bookings of other airlines for mutual benefits (Fieldstadt, 2015). The
presence of this oligopoly reflects in the pricing structure of the tickets. Even during the low
season's customers are paying more because of the policy of “discipline” adopted by the cartel of
Airlines in the market.
Question 2
To come up with a “yield management” from the limited resources during a lean season, airline
companies are deliberately optimizing the number of flights on any given route. To achieve this
status they are sharing inquiry data and allowing only a single player to operate on a single route.
They are also taking the support of the robots to hide, necessary information from the customers.
The policies set by the regulatory authorities allow airlines to keep the price on the higher tab
following the demand of the tickets. Apart from it, a flight running with full capacity brings