MBAA 523 Advanced Aviation Economics – final

Question 1.

Explain the theory and practice of 3rd degree price discrimination in the airline industry

Question 2

Is airline price discrimination just unfair or are there benefits to both business and leisure passengers?

Question 3

Why would a network carrier, such as American Airlines, provide service to a small city that an archetypical low-cost-carrier would not?

Question 4

Most airline routes in the US, Europe, and increasingly worldwide, are intensely competitive, yet most are oligopolies. What model of oligopoly is consistent with the price competition typical of the airline industry? Explain.

Question 5

Define and discuss the major types of air cargo (characterized by the motivation of the shipper or the reason for using air freight instead of some form of ground transportation).