The impact of Southwest Airlines on Commercial Aviation Research Paper

The impact of Southwest Airlines on Commercial Aviation - Research Paper Example 311). Along the way, it refined its low price strategy by cutting down on food and beverage offerings, mandating open seating which increases capacity, flying only one type of plane, locking in low fuel prices when the fuel prices spiked in 2008, and favoring secondary markets such as Chicago Midway over congested markets, such as Chicago O’Hare. These strategies helped Southwest cut prices, and the result of Southwest’s ability to slash prices has been nothing short of astounding on the entire airline industry, resulting in fare cuts across the board, and substantially increasing airport traffic for the airports that serve Southwest in relation to airports that do not. The result of the impact of Southwest Airlines on the airline industry has been so significant that it was given a name – the â€Å"Southwest Effect†. Different studies have done different analyses on the Southwest Effect. Morrison (2001) performed a study on the aggregate effect of Southwest on Southwest’s competition, then compared the aggregate estimate with fare reductions that were the result of deregulation, as a way to quantify Southwest’s effect on the success of deregulation (Morrison, 2001, p. 241). Morrison stated that the airfares on a given route are influenced by another airline in three ways. First, is when the other airline serve a given route; second, when the other airline serves an adjacent route that is seen by consumers to be a reasonable alternative to the first route; and third, the other airline affects fares if the existing airlines on a route lower their fares in order to keep out potential competitors (Morrison, 2001, p. 241). Morrison quantified Southwest’s impact on each of these categories, stating that there was a potential for Southwest to impact 94% of domestic passenger miles (Morrison, 2001, p. 243). His unit of measurement for this impact was an equation

Antitrust Practices Essay Example | Topics and Well Written Essays - 500 words

Antitrust Practices - Essay Example This is what F.T.C termed as â€Å"prefrencing†. The pecuniary cost and the non pecuniary cost that was associated with this case we are concerned about the effect on innovation,consumer and investment (Hylton, (2003). It took the commission about a yard to come to the conclusion after carrying out a myriad of investigations that were brought forward by google competitors. The antitrust experts said they would likely push for more sweeping obligations on Google corporate demeanor in the future so that it will not use its powerful position in internet o foster unfair advantage in other business thus giving stifle competition. The cost at which the government may try to enforce the principle of oligopoly in fields as fast moving as internet search, smart phones and online commerce will be quite challenging. The F.T. C was adjudicating for the broad principle so that there would be an agreement not to discriminate in favor its products and services over smaller competitors. The case with google is similar to that of Microsoft. It drew complaints from antitrust regulators and rivaling companies as it expanded its business beyond its dominant product and search advertising. Google is known to have bellicosely gained from its partnership with other fields that include Smartphone software and online commerce. As Google expands its empire, it takes on new competitors and brings formidable forces this making its rivals to suffer. However, Google has taken a stand that is improving its products and services in order to benefit the customers and the economy (Posner, 2001). The Antitrust laws help to serve as the ultimate protector from the competitive process under the free market economy. With this process, it will promote competitive prices and customer choice so that the whole society will benefit from all the possible allocation of resources. The antitrust laws help to ensure open and free markets and prevents conducts that