‘Singapore Airlines (SIA) said it has no plans to take an equity stake in its bankrupt alliance partner United Alliance.’a)Describe the type of competition that exists in the airline industry. (10)b)What are the microeconomic options that are opened t

Q2
Part (A)
The type of competition that exists in the airline industry is an oligopolistic one. Oligopolisitic firms usually firms usually sell differentiated products or homogeneous products. Clearly, the airline industry may be providing a homogenous service of air flights, but differ in their departure and arrival destinations. Airline industry faces many barriers to entry. A few big firms, like Singapore International Airlines, Virgin, Emirates and many more, also usually dominate it.
The barriers of entry are usually restrictive into allowing new competitors to enter into the market. The issue of product complexity comes in when there is a necessity to provide consumers with efficient services, along with the airline service. As consumers need to learn a lot about the product before purchasing it, efficient services has to be provided to help consumers make an informative purchase. Certain firms fail to provide this service, thus are unable to enter into the market. Thus, a...