Professional Documents
Culture Documents
Indigo
9
29.5
19.8
Jet Airways
Air India
(Domestic)
5.4
19.1
17.1
JetLite
Spicejet
GoAir
Market Player
Market Share
Market Share
Square
Indigo
29.6
870.25
Spicejet
19.8
392.04
19.1
364.81
Jet Airways
17.1
292.41
GoAir
81
JetLite
5.4
29.16
Total
100
2029.67
C4 Concentration Ratio
Low Concentration: A concentration ratio of 0 to 50
percent is commonly interpreted as an industry with low
concentration. Monopolistic competition falls into the
bottom of this with oligopoly emerging near the upper
end.
Medium Concentration: A concentration ratio of 50 to 80
percent is considered an industry with medium
concentration. These industries are very much oligopoly.
High Concentration: An industry with a concentration
ratio of 80 to 100 percent is viewed as highly
concentrated. Government regulators are usually most
concerned with industries falling into this category.
Delhi-Bangalore Snapshots(2015)
Pricing Strategy
Graph1
Graph2
Delhi-Bangalore Contd
An example to explain Peak load
pricing in airline industry
We can decipher from graph 1 that for the month of June and July 2015, no two
airlines charge the same price, which reconfirms the fact that prices are never
equal in an oligopoly market structure. However we can also infer that even though
the prices are not equal they do not differ greatly. This is because on account of
considerable price variation one airline could loose its market share to another.
On comparing the airfares on the Delhi Bangalore route during the month of June
2015(Graph 1),and around Deepawali (Graph 2) which is falling on 11 th November
2015.As we can see that the price on an average during June is around
Rs.4000,however around 11th November the price is already Rs.7500 i.e. the
industry is following peak load pricing. Moreover in the past we have seen that as
Deepawali day approaches the prices soar.
As we can see that for 23 July 2015,for the same GoAir flight the
airline is charging different prices for different market segments i.e.
its following third degree price discrimination .The business class
ticket is approximately three times of the economy class ticket.
Moreover the airlines also follow third degree price discrimination
across different routes, day of the week, time of the day and
whether the ticket is refundable/non-refundable .The ticket prices
also vary greatly depending on whether the flight is non-stop or
direct.
In this article the airline industry was blamed of forming a cartel via
tacit collusion wherein all the airlines simultaneously raised airfares to
roughly around the same levels. Complaint was registered with the
Competition commission of India(CCI), an apex body that closely
monitors abuse of dominant market position, cartelization and bid
rigging activities are among the main anti-competitive practices.
Conclusion
References
http://www.air-passenger.com/#
http://www.cleartrip.com/graphs/
http://timesofindia.indiatimes.com/business/india-business/
Airlines-special-sales-are-a-scam-Passenger-association/art
icleshow/44947759.cms
http://www.oneindia.com/new-delhi/passengers-associationcomplaints-against-air-fare-discounts-dgca-1547071.html
http://www.faredetective.com/farehistory/flights-from-Delhi
-DEL-to-Bangalore-BLR.html