https://padlet.com/martincheng/crv0grorn82m en-us 2016-11-13 06:23:45 UTC 2025-04-18 21:43:58 UTC hello@padlet.com martincheng https://padlet.com/martincheng/crv0grorn82m/wish/138086502 This article reports that US airfares are expected to fall in 2017 as a result of overcapacity and stiff competition between budget airlines and legacy airlines. Short-haul economy fares and long-haul economy fares are expected to drop 3 per cent and 1.5 per cent respectively. 

Due to the lower costs of fuel, cost of production has fallen and there is an increase in the quantity of fuel supplied resulting in airlines increasing the number of flights, which causes a shift in the supply curve to the right in the airline market. With seats for sale growing faster than the pool of passengers to buy them, airfares for US flights have fallen resulting in an increase in demand for flights. This explains how overcapacity has contributed to the drop in prices of US airfares.

Moreover, budget airlines such as Spirit Airlines Co have further lowered the price of their services, hence increasing competition in the airline industry. As a result, top airlines in the US such as American Airlines Group Inc and United Continental Holdings Inc have no choice but to market their services at lower prices in order to keep up with the stiff competition in the airline market. Price elasticity measures the responsiveness of the quantity demanded of a good or service to a change in its price. The greater the amount of substitutes available to consumers, the more price elastic the demand for a good or service. Since there are a plethora of airline companies for consumers to choose from, the airline industry is considered price elastic.  Therefore, since the airline industry is price elastic, the quantity demanded for flights is very responsive to a change in price of airfares. This explains why the drop in airfares results in an increase in quantity demanded for flights.]]> 2016-11-16 14:47:24 UTC https://padlet.com/martincheng/crv0grorn82m/wish/138086502 marcustzeheng https://padlet.com/martincheng/crv0grorn82m/wish/138090673
This article mainly talks about the growing demand for airline pilots as well as the lack of supply of pilots.

To meet the demand for air travel, an estimate of around 617,000 commercial airline pilots would be needed by 2035. However, currently there are only around 130,000 commercial pilots in the world and 76% of airlines say they more pilots would be hired by 2017.

The problem of shortage of pilots are threatening airlines as this shortage is the most serious one since the 1960s. Shortage of pilots have also caused smaller regional airlines to file for bankruptcy. Other domestic airlines in the united states have also cut routes due to the shortage of pilots.

Even outside of the U.S, there are high demand for with the Asia-Pacific region demanding 248,000 new pilots by 2034 in order to sustain growth. Europe will require 104,000, the Middle East 58,000 and Latin America 51,000.

Globalization has caused the increase in the need of commercial flights as well as pilots and this has start to outweigh the resources available.
While the demand for pilots are increasing the number of pilots that are available are decreasing due to reasons like an ageing population.]]> 2016-11-16 14:55:25 UTC https://padlet.com/martincheng/crv0grorn82m/wish/138090673 matthewmariano7 https://padlet.com/martincheng/crv0grorn82m/wish/144794742 The airline industry undergoes oligopoly, where only a few sellers that provide similar products or services but differ in branding and promotion methods. Oligopoly occurs when the top 4 firms of the industry earns generally more than 60% of the total sales.  There is also a substantial barrier to entry, discouraging potential competitors to enter the industry. This 2 characteristics are applicable to the airline industry.

This article reports that the American airline industry has significantly shifted to an "oligopolistic" market due to 2 major changes in the market.

The first change would be that multiple horizontal merges have taken place in the industry. This would equate to a smaller number of large firms supplying most of the output in the airline market industry. Thus, the industry has become more oligopolistic due to multiple horizontal mergers. This first change is further aided by the lobbying efforts made by the airline corporations.

The second change would be that large institutional investors are investing in the four major airlines in the States, namely American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. This investments have resulted in increased prices and reduced seat capacity. The effects are similar as to what happens with consolidation mergers. This has thus made the industry more oligopolistic. 

]]> 2016-12-26 13:16:33 UTC https://padlet.com/martincheng/crv0grorn82m/wish/144794742 marcustzeheng https://padlet.com/martincheng/crv0grorn82m/wish/145918712 This graph illustrates the demand and supply of the pilots in the airline industry.
The shift in demand(increase) is caused by globalisation, increasing the need of commercial flights. The shift in supply(decrease) is caused by the reduced amount of available pilots left in the airline industry.

These two shifts would increase the price equilibrium of the airline pilots which is their salary. Indicating that the salary of the airline pilots would increase due to the increase in demand.]]> 2017-01-09 08:28:24 UTC https://padlet.com/martincheng/crv0grorn82m/wish/145918712 marcustzeheng https://padlet.com/martincheng/crv0grorn82m/wish/145919509 2017-01-09 08:33:48 UTC https://padlet.com/martincheng/crv0grorn82m/wish/145919509 marcustzeheng https://padlet.com/martincheng/crv0grorn82m/wish/145920281 2017-01-09 08:38:51 UTC https://padlet.com/martincheng/crv0grorn82m/wish/145920281 marcustzeheng https://padlet.com/martincheng/crv0grorn82m/wish/145920399 2017-01-09 08:39:38 UTC https://padlet.com/martincheng/crv0grorn82m/wish/145920399 marcustzeheng https://padlet.com/martincheng/crv0grorn82m/wish/145921640 This graph illustrates the price elasticity of demand of the airline industry. 
When the demand is more price elastic, a decrease in price will bring about a larger proportionate increase in quantity.
From the graph it can be seen that there is a movement from P2 to P1  resulting in the movement from Q2 to Q1. However there is a larger proportionate movement from P2 to P3 which resulted in a larger movement from Q2 to Q3.
Therefore as seen in the graph, the demand in the airline industry is price elastic and consumers are very responsive to the price change.



]]> 2017-01-09 08:48:50 UTC https://padlet.com/martincheng/crv0grorn82m/wish/145921640 matthewmariano7 https://padlet.com/martincheng/crv0grorn82m/wish/145921955 2017-01-09 08:51:36 UTC https://padlet.com/martincheng/crv0grorn82m/wish/145921955 matthewmariano7 https://padlet.com/martincheng/crv0grorn82m/wish/145922567 2017-01-09 08:56:42 UTC https://padlet.com/martincheng/crv0grorn82m/wish/145922567 martincheng https://padlet.com/martincheng/crv0grorn82m/wish/146019209 Demand & Supply:
Good analysis. Please include diagram on Demand & Supply

Elasticity: 
Which type of Elasticity of Demand? Please include explanation on Elasticity for above. Thanks.

Oligopoly:
Please explain meaning of Oligopoly. Include the features to show that industry is oligopolistic.]]> 2017-01-09 15:51:38 UTC https://padlet.com/martincheng/crv0grorn82m/wish/146019209