Financial Condition of the Airline Industry Hearings Before the Subcommittee O

Cover Financial Condition of the Airline Industry Hearings Before the Subcommittee O
Financial Condition of the Airline Industry Hearings Before the Subcommittee O
United States Congress House Committee On Publi
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lAPA believes that the culprit in this scenario is not the financially weak carriers that institute these fares to generate cash, but the major airiines that match these fares when the fares are below their costs. Whether the carriers are in Chapter 1 1 or not, there will always be low fares offered by carriers. The major must decide on a case by case basis whose fares they will match and in which markets. For example, it was the response of American Airlines to non-Chapter 1 1 Northwest Airiin
...e's "Kids Fly Free" fare that set off last year's fare war.
It is also interesting to note that the majors do not match every fare and meet every challenge. The fare structure of Southwest Airlines is not matched, and when it is rarely tried by the majors it is unsuccessful. Low fare niche carriers like Kiwi, Reno, and Skybus, don't always attract competitive responses. Even if the majors feel that they must match these low fares, they can severely limit the seats offered at that fare. Without the sophisticated computers of the majors, they can provide as much or as little capacity as they want.


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