ABSTRACT

Forthereasonsdiscussedinthepreviouschapter,afranchisingsystemisadvocated.

Thisislikelytoprovemuchmorerobustincounteringthecompetitionconstraining

tacticsofapowerfulairlineindustry.Amendingexistingregulatorypolicyinsucha

wayastotackledirectlytheallimportantissueofmarketentrywouldappearto

offermanyadvantagesovertheantitrustapproach.Givenitsspecificcharacteristics,

theindustryisnaturallyduopolistic.Underfreemarketconditions,producersare

abletoacquireconsiderablemarketpowerandexploititinbothsubtleandunsubtle

waystoprotectandenhancetheirmarkets.Acquiringtheabilitytocontrol

competitionenablesfirmstobethearbitersindetermininghowmuchandinwhich

particularmarketstoengageinsuchactivities.Theuncertaintyofacompetitive

environmentisvirtuallyeliminatedasaconsequence.TheUSexperiencehasshown

howadeptandimaginativeairlinemanagerscanbeinexploitingthespecific

featuresoftheirindustrytoachievethis.Fewotherindustrieshavelentthemselves

tothisdegreeofstagemanagement.