The demand of consumers for schedule frequency creates tremendous excess

The demand of consumers for schedule frequency

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its product below fully allocated costs. The demand of consumers for schedule frequency creates tremendous excess capacity with no shelf life, pushing prices up. The demand of consumers for low prices and the perception that air transportation is virtually an undifferentiated commodity drive prices down to levels that, too often, fail to cover fully allocated costs (Wensveen, 2011).
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AIRLINE ECONOMICS 5 f) Sensitivity to Economic Fluctuations The impact of a recession is not unique to the airline industry, but what is different is that as a service sector, it is much slower to recover because spending on air travel is discretionary. In a recession, people tend to postpone long-distance travel to save not only on airfares but also on the expenses associated with the trip. Furthermore, travel is one of the expenses a business can cut immediately during tough economic times (Wensveen, 2011). g) Close Government Regulation Transportation modes, including the airlines, have a long history of both support and regulation by government. The FAA regulates most aspects of airline operations that relate to safety and navigation, as well as to environmental conditions (Wensveen, 2011). References
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AIRLINE ECONOMICS 6 Wensveen, J. G. (2011). Air transportation: A management perspective (7th ed.). Farnham, England: Ashgate. khanacademy.or (2016). Between perfect competition and monopoly [Video podcast]. Retrieved from - competition-topic/monopolistic-competition-oligop/v/oligopolies-and-monopolisitc- competition merriam-webster.com. (2016). Oligopoly. Retrieved from - webster.com/dictionary/oligopoly
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  • Fall '16
  • Kelly Lawton
  • Economics, Airline Economics

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