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In general terms, what were the airlines accused of doing and why?
An important concept of economic that is applicable to businesses is cartel. This concept of Cartel implies the fixation of prices for products and services by businesses with a view to outperform in competition in the industry. This is an important strategy applied by businesses with a view to gaining higher profit from the market. In this particular strategy, the main focus area has been to charge higher from customers by way of fixing prices for commodities at higher level. This is generally a threat to competition and the ultimate losers are the end customer because they have to pay higher prices for the products and services they consume. An analysis of the given airline industry also indicates that this particular strategy of cartel has been applied by many of the Airlines with a view to performing competition and achieving higher profitability. Some of the examples of airlines that have entered into this particular strategy of cartel are discussed as follows:
Overall the analysis of all these Airlines indicates that they are accused of charges by consumer Commission because of considering cartel strategy by them with a view to fixing higher prices for their cargo services. The main reason for these airline companies accused of charges is mainly to avoid these companies 2 benefit unethically by way of ignoring competition. The main reason is to encourage competition within these Airlines so that the end consumers would ultimately benefit from such competition.
Q. What difficulties are there for such agencies in attempting to take enforcement action against such companies?
Q. Why are these accusations so important both to the airlines (and other companies in terms of their forward planning for risk management) and for the enforcement agencies involved?
Q. What does this example suggest as to the role of, and limitations to, national law and institutions in managing and regulating behaviour in a global economy?
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15 APA references.
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