Friday, August 16, 2013
Perhaps The Airlines Industry Should Be A Regulated Monopoly
I posted an article on potential merger of US Air and American Airlines to show how pricing is done in an oligopolistic industry. The airline industry has not been a very profitable industry, however, even with little price competition. Moreover, service and innovation have not improved since the airlines were deregulated and competition was supposed to reduce prices and improve service. This article suggests that some industries work better as regulated monopolies. Perhaps a return to that form of organization would work better than depending upon competition to keep prices in line without reducing services.