Dangerous Dominance of Few Large Airlines
The world’s twenty airlines belong to the United States, Singapore, France, Italy, Germany, Netherlands, Canada, Spain, Britain, Scandinavia, South Korea, Japan and Australia. The biggest airline network also belongs to the airlines of these nations. Analysis of the case shows the heavy traffic in the air routes of these areas. It is seen that all twenty airlines dominate in the network. It should be noted that these twenty airlines form only very few of the many airlines all over the world. There are many governments as well as privately owned airlines that are operating internationally.
If the air routes or the networks get dominated by very few players the smaller airlines will have fewer available networks for service. This is highly harmful to their overall performance. The smaller airlines will get less international entry because the space in the network will be reduced and gets dominated by larger players. This will make the smaller players choose any long route which may not be economical for them as well as the customers. As a result, the smaller players are wiped away from space. They have to operate in their domestic networks for survival.
This limited market will hamper the growth of the company. When the network is dominated by the largest players and the smaller players are wiped away from the space the largest players will monopolize the market by charging higher prices. This is harmful to the interest of the customers as they are charged more for the services.