Price Strategy and Organisation Conduct in Airline Industry

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INTRODUCTION Airlines industry remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries. Today the global airline industry consists of over 2000 airlines operating more than 23,000 aircraft, providing service to over 3700 airports. The growth of world air travel has averages approximately 5% per year over the past 30 years, with substantial yearly variations due to both changing economic conditions and differences in economic growth in different regions of the world. In Europe and North America, where the air travel market is already highly developed, slower growth of 4% is expected. The most dynamic growth is on the Asia Pacific region, expected of 9% due to fast-growing trade and investment are coupled with rising domestic prosperity. Despite financial turmoil in the region, it’s expected not affected on the growth. Despite some may considered airline industry is a monopoly industry, due to most of the airliners is own and control by government, thus, people may perceive it is a profitable industry, on the contrary, airline industry has long been an unprofitable industry. The industry is characterized by intense competition, threat of substitution, threat of new entry and strong buyer/supplier power which lead to dangerously low profit margins. To make things even worse, the airline industry is also adversely affected by volatile fuel prices, economic conditions and for certain airlines, competition from low cost airlines as a factor. This project evaluates the conduct or behaviour of pricing strategies and integration and merger activity (code sharing) in airline industry, particularly, Malaysia Airlines. The price measurement will be compared Malaysia Airlines price with other premium/national carrier and also

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