ABSTRACT
Forthereasonsdiscussedinthepreviouschapter,afranchisingsystemisadvocated.
Thisislikelytoprovemuchmorerobustincounteringthecompetitionconstraining
tacticsofapowerfulairlineindustry.Amendingexistingregulatorypolicyinsucha
wayastotackledirectlytheallimportantissueofmarketentrywouldappearto
offermanyadvantagesovertheantitrustapproach.Givenitsspecificcharacteristics,
theindustryisnaturallyduopolistic.Underfreemarketconditions,producersare
abletoacquireconsiderablemarketpowerandexploititinbothsubtleandunsubtle
waystoprotectandenhancetheirmarkets.Acquiringtheabilitytocontrol
competitionenablesfirmstobethearbitersindetermininghowmuchandinwhich
particularmarketstoengageinsuchactivities.Theuncertaintyofacompetitive
environmentisvirtuallyeliminatedasaconsequence.TheUSexperiencehasshown
howadeptandimaginativeairlinemanagerscanbeinexploitingthespecific
featuresoftheirindustrytoachievethis.Fewotherindustrieshavelentthemselves
tothisdegreeofstagemanagement.