Discussion

Discussion 5 

• Describe globalization as it applies to the airline industry. Why is it so difficult for U.S. carriers to establish hubs outside the United States?
• Why are bilateral agreements between the United States and many foreign countries to the disadvantage of U.S. carriers?
• How would an open-sky agreement improve this situation?
• Describe how code-sharing agreements operate. What is the impact on competition? How does the airline industry differ from other industries with regard to globalization?

Discussion 6

• Describe the role of the major and national carriers. Identify some of the carriers in each category. 
• How did the regional carriers get started?
• Describe a typical regional carrier in terms of its role in the air transportation system, type of aircraft flown, and route structure.
• What is meant by hub-and-spoke network? 
• Why has the number of regional carriers declined since deregulation? 
• Describe some of the changes that have taken place in this segment of the industry. What is code sharing?

Discussion 7

• Why do you think that air carriers are so mutually dependent? 
• How have pricing practices changed since the prederegulation days? 
• What was the major form of competition in the prederegulation era? Discuss some of the causes of the price wars in the 1980s. 
• Do you foresee prices stabilizing in the next several years? 
• Why is there a tendency in oligopolistic industries toward price rigidity and nonprice competition?