ABSTRACT
Chapter Overview
Supply of output is the third of four elements in the operating performance model around which Part 2 of the book has been structured:
Traffic × Yield > < Output × Unit Cost
= OPERATING PERFORMANCE (i.e., PROFIT or LOSS)
This chapter will define supply, look briefly at the economics of supply, and summarise the supply-side characteristics of the airline industry. Market structure, barriers to entry, and competition policy will be considered, and the threat to future output growth posed by environmental issues will be touched upon. Finally, the supply-side of capacity management will be discussed ahead of more detailed treatment in Part 3 of the book.
