Oligopoly airasia

The competition between low cost carriers will be expanding their routes to more places, safety and on-time performance and low cost.

This can save up the cost of maintenance and reduce the cost of training. Airasia will continue to expand their market and carry on with the title of best low fare airlines in Asia and even the whole world.

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More people would buy from Airasia thus, reducing the cost per flights. Even in certain promotions Air Asia travellers were offered to fly free, they only had to pay for the airport tax and fuel surcharge.

They will however have to avoid getting complacent, as they may in some point experience the law of diminishing returns, which can be defined as an extra input is added in the production, a point will eventually be reached at which additions of the input yield progressively, or diminishing, increases in output.

Oligopoly airasia

Leave a reply AirAsia Berhad, a global renowned Malaysian low-cost airline who over just a decade ago, was on the verge of bankruptcy with over RM 40million amount of debts, is today a company worth billions. The major types of market structures prevalent in the economy are perfect competition, monopolistic market, monopoly, oligopoly and duopoly. What is inelastic demand? Airasia will continue to expand their market and carry on with the title of best low fare airlines in Asia and even the whole world. This makes sure the aircraft is constantly being utilized, which in turn maximizes revenues. However, the collaboration raises a number of concerns. Besides, Airasia also came up with the idea of lowering their personnel expenses by increasing the salary of crews and increasing their workload as compare to biggest rival MAS. Although it has quite a number of trade barriers that is in its way, Airasia also has some benefits where other firms do not benefit from, such as, economies of scale. One of the trade barriers is that AirAsia enjoys is the Economies of scale. In addition to the passenger sales ticket, Airasia also includes holiday packages, which is affordable around Asia. Supply The supply of Airasia is upward sloping from left to right.

Demand The demand curve of Airasia is downward sloping from left to right. Then again, in the long run they have already been successful.

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Even 12 years ago, he had the vision that flying would evolve into a necessity, and therefore would have an inelastic demand. However, firms could compete along other dimensions as well; such as by doing advertises to capture the market quickly; both of the firms Air Asia and MAS have advertised much kind of promotions or season seats price and promoting their brand value via internet and so forth nowadays.

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This is due to the specialization that they have in their departments that they have developed after division of labor. One of them is that there is a possibility that a monopoly has been created due to the lack of competition in the industry.

In addition to the economies of scale that Air Asia benefits from, they have also benefitted from managerial expertise as Air Asia has implemented numerous cost savings plans such as the following. Liau, Y.

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