Do you think the U.S. airline companies would be better off if there was an oligopoly?

Answer 1

In a strict sense yes the airlines would be better off.

This would however, result in less competition which would result in fewer flights, higher fees, and less or lower services. This is the typical result of oligopolies.

Answer 2

The airlines would be better and healthier but the consumers would be in a real bind...

Fares would skyrocket...
regional airports would sufer and lessen services

Right now the airlines (especially the oldest ones) are suffering through antiquated business plans and labor agreements that give manangement little wiggle room to make real decisions to keep the compnaies afloat.

Newer airlines with better business models and flexibility are growing and will soon overtake the "hub dependent" airlines.

Countries serves by National Airlines are usually quite small with few airports and alternative long range transportation such as high speed rail.

The US does not have this due to size and economy.

Poorly run monoply Amtrack offers no alternative to airlines. Therefore, autombiles are still the primary source of long range travel in the US.

The only real solution for healthy airtravel is for a few more "dinosaurs" to go DOA and more low cost airlines to start.

You have already seen Eastern and Pan Am go under and I expect a long list of others to soon join them.....

Mergers have artificially slowed the closing rate

Answer 3

My opinion is that there are at least two ways (*others can probably think of many more ways and variations) to organize the airline industry. 1) Oligopoly-a few airlines that are highly regulated and share economies of scale. 2) Many small companies that compete for all routes equally without government involvement.

Pros
For option 1)
Universal service to many cities.
Rates are regulated and controlled so all customers pay average fares. (Those traveling on less desirable routes will pay similar fares to those on high traffic ones).
Healthier companies, less debt, more capital equity.
Much reduced chance of bankruptcy and associated social costs.

Cons for option 1)
Reduced innovation and efficiency.
All lower fare customers will pay more to fly.
Accountability for poor business decisions is very limited.

Pros for option 2)
Companies are completely free to pick and choose which markets they will compete in, thereby creating competition and reduced rates for some in lucrative markets.
Encourages innovation and technological advancements.
Businesses must be efficient to survive-better resource allocation.
Healthier financial status afforded by distributing risk across many small companies-the fall of one does not send shock waves through the industry and economy.

Cons for option 2)
Many less desirable locations will see a dramatic increase in fares.
Overcrowding in airports and airspace.
Without regulation, some unscrupulous providers might shun maintenance and safety issues for profit gain.
The most succesful business model will tend toward a monopoly if the balance is lost.

Others might be able to offer more issues than these.

Answer 4

The U.S. airline industry IS an oligopoly. I think your question may be better phrased as "whether the industry should be regulated or stay de-regulated"?

Answer 5

if your a fan of price fixing, sure