US Air has merged with American Airlines 50 Points US Air has merged with Americ
ID: 1215323 • Letter: U
Question
US Air has merged with American Airlines
50 Points US Air has merged with American Airlines and no longer exists. Is this a positive or negative change for those who travel? Note: there are only 11 major mainline passenger airlines in the United States: Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue, Southwest Airlines, Spirit Airlines, United Airlines and Virgin America. 1. A. ist the pros of having only 11 airlines List the pros of having only 11 airlines List the cons of having only 11 airlines A. List the pros of US Air has merged with American Airlines List the cons of US Air has merged with American Airlines B. C. If you could stop the merger would you or not? Give one example of a document to prove your point, must be academic in nature. Use of Wikipedia article are not allowed D. E. Is the market for Airlines a monopoly or an oligopoly? Explain:Explanation / Answer
(1) The merger os US Air with American Airline shows non existence of the merger which is negative change for those who travel. The reason is that it should help to cater good airline service at an affordable price too. But the merger did not show any positive inclination towards the merger it rather did not exist for long which is a negative change for those who travel.
(A) The pros of having only 11 airlines is that there is frequent connectivity through airplanes from one city to another or one country to another country. It shows availability of airplane tickets at an affordable prices to the customer due to existence of oligopoly market. The cons of having only 11 airlines is that when competition increases the price of the airline tickets decreases which reduces flight services such as free meals, beverages available at limited stocks, etc. This creates costly meals in flight and extra cost is charged on services available inside airplane.
(B) The pros if US Air merger with American Airlines is increase in the market value as the customer would find good services expected from the joint venture of two companies in airline industry. The investment would increase which would increase the benefits offered to the customers. It would give rise to increase in the travellers choosing the airline of the merged companies.
The cons of US Air merged with American Airlines is that if the market turns down due to slow economy then the huge investment made by joint ventures would not be able to recover well thereby, causing lose to both the companies.The prices at the time of recession could be reduced and the slow demand would tend to create more spendings to maintain the services provided by the merged companies.
(C) The merger would be stopped if the market analysis made by the firms shows lack of revenues in future. The financial prospect should be stronger for both the companies to bear losses at any instant of time. Initially, the plans seems to be successful in which mergers could analyse revenues. But, the oligooly market does not assure long term revenues due to high competition. The discounted rates airplane ticket could exist on a long term basis therefore, the merger would tend to face obstacle to over come losses on a long term.
(D) The example is that, the American Airline merger with the US Airways showed a horizontal merger. It means that both the airline companies used to increase the demand of the services provided to the customers in a similar manner. It helped to beta the air travel rates at an affordable cost for the customers for international and domestic flights.
(E) The market of airline is an oligopoly market. There are large number of airlines company which aims to provide affordable rate airplane tickets. The rise in competition in the market fails to reach the demands among the customers if there is delay in reaching the destination. Since, all the airline companies are working carefully for the development of the services and revenues by controlling the prices therefore, the market is said to be oligopoly in nature.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.