ABSTRACT

Economists usually describe the certificated airline industry as closely approximating an oligopolistic market structure. An oligopoly (from the Greek oli, meaning “few”) is an industry composed of a few firms producing either similar or differentiated products. A “few” can be 5 or 10 or 100 firms. A large percentage of our nation’s output of goods and services are produced by oligopolistic industries: steel, automobiles, oil, and aluminum, to mention a few. Oligopolistic industries typically are characterized by high barriers to entry. These usually take the form of substantial capital requirements, the need for the technical and technological know-how, control of patent rights, and so forth.