What is the market structure of airlines?

Answer 1

The airline industry typically operates under an oligopoly market structure, characterized by a small number of major airlines dominating the market while facing competition from regional carriers and low-cost airlines. This structure allows for some degree of price setting, as the major players can influence fares and capacity. Additionally, barriers to entry are high due to significant capital requirements, regulatory hurdles, and the need for established routes and brand recognition. As a result, competition is often based on service quality, frequency, and pricing strategies rather than purely on price alone.