The paper 'Competition Versus Predation in Aviation Markets' is a great example of a Macro and Microeconomics Case Study. Qantas has been facing a downward growth for the last few years in that; the airline lost most of its hold on regional, domestic, and, international customers (Forsyth 2005, 254). In the regional front, competition for Qantas is brought about by major airlines such as Air New Zealand, Etihad and, Singapore Airlines. Qantas faces domestic competition from Virgin airlines, which is an Ansett project. Internationally, the number of competitors increases by the day.
The airline is fighting to maintain its 65% market share in Australia (Ryan 2014, p. 16). The market structure in the airline business has grown and the international scene has become joined through globalization. The move has enhanced competition since there are international airlines offering cheap seats compared to Qantas. The market structure in the airline business in Australia is more or less oligopoly since the chief players in the business control prices. Internationally, Qantas has lost its footing because of the cheap seats offered by its competitors.
The oligopoly structure weighs on the resources of the airline to match up to its competitors. Price is another segment that explains the nature of competition for Qantas. Since the airline business has been globalized, the big wigs in business control pricing (Forsyth 2005, 254). The airline is forced to adhere to the prices set to maintain their customers and stay in business. However, the pricing hurts the operations of the airline that has registered losses in its international business. Interaction between Virgin airlines and regional airlines such as Air New Zealand, Etihad and, Singapore airlines also affects the prices (Ryan 2014, p. 16).
The four airlines own a vast market share, therefore; the prices they set affect Qantas. The interaction of the airlines also increases the market share of Virgin airlines because the three regional players are state-owned and therefore, the percentage of investment is high.
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