monopolistic competition in aviation

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Monopolistic Competition in Aviation

Monopoly is the domination of services or products provision by single or several companies with their main objective of reaping the highest profits possible . The companies involved produce similar services that are imperfectly substituted (Borenstein , 1992 . Then other companies in this competition are able to get into the same type of business provided the they can realize profits that are attractive to them . These companies are profit maximizers and will do any thing

to raise their profits throughout their business lifespan . They are finally not price takers and posses sufficient market power to control the supply and flow of services and their other products (Morrison Winston , 1995

According to Hendricks et al (2004 , consumer incentives to buy the services are generally unavailable since the market is guaranteed . It is a major cause for loss of jobs and suppresses development of similar or related companies to remain as the only services or products provider in the market . Where monopoly have had great negative effects in relation to hiking of prices and poor services delivery policies regulating the process may be needed to protect the consumers against excessive exploitation (Brueckner ,1999

According to Caves (2001 , aviation industry has been dominated by monopoly at different levels in the world either due to poor policy framework , technology unavailability , poor management or lack of enough finances to steer the competing industries . However great development have been achieved since the onset of...