Market Share US-EU Market 12 months through June 2009 per DOT
Alliance
Member Airlines
Share %
Star
Austrian, bmi, Continental, LOT, Lufthansa, SAS, Swiss, TAP, United, Air New Zealand
31.7
Skyteam
Air France, Alitalia, Delta/Northwest, KLM, Czech
28.9
Oneworld
American, British Airways, Iberia, Finnair
22.3
-
Virgin Atlantic
7.1
-
US Airways
4.6
-
All other airlines
5.5
In this situation, where 19 airlines have collapsed themselves into three anti-trust immune alliances, and where they hold 82.9% of the market between them (or 87.5% if US Airways is added in with the rest of its Star Alliance partners), this is not just an oligopoly by all measures, but probably a textbook monopoly (monopolies can have more than one major player).
And so we feel sadly justified in describing this event (anti-trust immunity being granted to the Oneworld Alliance) as marking the death of airline competition (across the Atlantic).
Other Factors To Test for Oligopoly/Monopoly
The market share test we've used in the preceding tables is a simplistic test that isn't always completely correct, and so, in cases of doubt, economists use some additional tests to see not only if the numbers show there could be an oligopoly, but to confirm if companies are indeed acting that way.
Sometimes, oligopolies can be present when companies have smaller market shares than the theory would suggest, other times, oligopolies are not present even when companies have much larger market shares than needed to cross the threshold level for oligopoly.
These tests are discussed in detail here and here. To boil down the economic theory into key bullet-point type concepts, oligopoly can be considered by marketplace characteristics and marketplace behaviors.
The marketplace characteristics have three main elements :
Small number of suppliers who between them control most of the market : We've spoken before about measuring... [continues]
Alliance
Member Airlines
Share %
Star
Austrian, bmi, Continental, LOT, Lufthansa, SAS, Swiss, TAP, United, Air New Zealand
31.7
Skyteam
Air France, Alitalia, Delta/Northwest, KLM, Czech
28.9
Oneworld
American, British Airways, Iberia, Finnair
22.3
-
Virgin Atlantic
7.1
-
US Airways
4.6
-
All other airlines
5.5
In this situation, where 19 airlines have collapsed themselves into three anti-trust immune alliances, and where they hold 82.9% of the market between them (or 87.5% if US Airways is added in with the rest of its Star Alliance partners), this is not just an oligopoly by all measures, but probably a textbook monopoly (monopolies can have more than one major player).
And so we feel sadly justified in describing this event (anti-trust immunity being granted to the Oneworld Alliance) as marking the death of airline competition (across the Atlantic).
Other Factors To Test for Oligopoly/Monopoly
The market share test we've used in the preceding tables is a simplistic test that isn't always completely correct, and so, in cases of doubt, economists use some additional tests to see not only if the numbers show there could be an oligopoly, but to confirm if companies are indeed acting that way.
Sometimes, oligopolies can be present when companies have smaller market shares than the theory would suggest, other times, oligopolies are not present even when companies have much larger market shares than needed to cross the threshold level for oligopoly.
These tests are discussed in detail here and here. To boil down the economic theory into key bullet-point type concepts, oligopoly can be considered by marketplace characteristics and marketplace behaviors.
The marketplace characteristics have three main elements :
Small number of suppliers who between them control most of the market : We've spoken before about measuring... [continues]
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