Who benefits from the airline industry consolidation?
REPORT CONTENT (Your report should cover the following topics):
1. General environment: Summarise the recent background in the performance of the airline industry, with reference to the impact of low cost operators on the market.
2. Air travel demand and supply: Analyse the drivers of air travel demand and discuss how elasticities depend on different categories of passengers (business / leisure). Analyse the structure of costs, economies of scale within the sector and discuss pricing strategies.
3. Market structure and competition policy: Assess the concentration of the sector. Discuss the regulation / deregulation of the airline industry and try to identify what should regulator consider when deciding on mergers in the industry
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