Report on the Competitive Conditions in the Airline Industry

Report on the Competitive Conditions in the Airline Industry

24th November 2016

Registration Number: 150759

Word Count: 2,198

Contents Page                                                           Pages

Terms of Reference         3

1.0 Introduction        3

2.0 Changes in Supply and Demand in the Airline Industry         3-5

3.0 Barriers to Entry and Exit         5-7

4.0 Structure of Competition in the Industry         7-8

5.0 Evaluation of the Regulation of Anti-Competitive Behaviour         9

6.0 Conclusion        10

Bibliography         11-12

Appendix         13-16

Terms of Reference

The author has just started as an analyst for a market research company specialising in researching competitive conditions in a range of UK industries. The author must choose an industry and compose a 2,000-word report on their specific industry and it must be completed by Thursday 24th November.

1.0 Introduction

The purpose of this report is to research into the competitive conditions in the Airline industry. Through research, the author will look at the recent changes to the industry’s supply and demand conditions, referencing the industry’s concentration ratio.  The author will then go onto analyse the nature of the airline industry, and the barriers to entry and exit. A main research point will be the structure of competition, seeking evidence of certain behaviours, for example airlines showing monopolistic behaviour. To conclude the report, the author will finish with offering an explanation of the regulation of anti-competitive behaviour and summarise their findings.

2.0 Changes in Supply and Demand in the Airline Industry

“Demands are human wants backed by the ability to buy” (Boddy.D, 2013), while supply is the ability to make something needed or wanted available to someone (Boddy.D,2013). There is a close relationship between supply and demand; a market consists of individuals or groups of businesses that are prepared to supply a product, to customers whom demand the product. A way of illustrating supply and demand can be through a straight line graph shown in appendix one; which shows how supply and demand can change dependent on the price, for example if price was to decrease; demand would shift left, as there would be a greater demand for the reduced price.