how much attention do you think airlines gives to their competitors prices?
Answers
Answer:
The major expenses that affect companies in the airline industry are labor and fuel costs. Labor costs are largely fixed in the short term, while fuel costs can swing wildly based on the price of oil.
For this reason, analysts pay more attention to fuel costs in the near term. Two-thirds of the costs of flying an airplane are fixed, so changes in fuel costs can swing a flight from profit to loss depending on how many people are on the flight.
Historically, the airline industry continues to be brutally competitive, even though the business of flying people all over the world and country has become an integral part of human life. The cost of flying continues to trend lower. The Internet has also created greater price transparency, reducing margins.