Oligopoly Airlines
1/ The marketplace characteristics have three main elements :
* Common Product Types : Members of an oligopoly provide similar products, perhaps with no distinction at all (eg raw materials such as metals and foodstuffs) or perhaps with distinction/branding but very similar functionality (eg automobike)
Air services.
• A few large firms dominate the market, who between them control most of the market : We've spoken before about measuring markets in terms of the total share owned by four and sometimes eight companies, but oligopolies can sometimes have as many as about 20 different companies, depending on other conditions. This domination is measured by concentration ratios: On the Vietnam domestic air services market, there are Vietnam Airlines (VNA), Jetstar Pacific Airlines (JPA), Vasco, Viet Air, Air Mekong, Blue Sky Air. Espealcially, Vietnam Airlines is playing the commanding position on the net of domestic flying pathway.
On the other hand, although The law of air service was newly promulgated in 2006 and give econmic components chance to join air transportation. However, up to now, Vietnam Airlines is still the firm commanding the market with the % of concentration ratios is alsway above 70%.
• Barriers to Entry : It is difficult for new companies to enter the market. Maybe there are huge capital investments required, long leadtimes, legislative restrictions, limited resources, or patent restrictions. In practice, in 2 years recently, some behaviors abusing firm’s commanding position did appear., such as: The aviation petrol and oil company that belongs to Vietnam Airlines was fined 3.37 billion by the competitive Council because of abusing it’s position to stop selling petrol for Jetstar Pacific, and this broke the competitive law. Besides, the behavior of giving promotional program stretch out freedomly, sale off up to 50% of the price of tickets on so many long-time flights, and not controlling the
* Common Product Types : Members of an oligopoly provide similar products, perhaps with no distinction at all (eg raw materials such as metals and foodstuffs) or perhaps with distinction/branding but very similar functionality (eg automobike)
Air services.
• A few large firms dominate the market, who between them control most of the market : We've spoken before about measuring markets in terms of the total share owned by four and sometimes eight companies, but oligopolies can sometimes have as many as about 20 different companies, depending on other conditions. This domination is measured by concentration ratios: On the Vietnam domestic air services market, there are Vietnam Airlines (VNA), Jetstar Pacific Airlines (JPA), Vasco, Viet Air, Air Mekong, Blue Sky Air. Espealcially, Vietnam Airlines is playing the commanding position on the net of domestic flying pathway.
On the other hand, although The law of air service was newly promulgated in 2006 and give econmic components chance to join air transportation. However, up to now, Vietnam Airlines is still the firm commanding the market with the % of concentration ratios is alsway above 70%.
• Barriers to Entry : It is difficult for new companies to enter the market. Maybe there are huge capital investments required, long leadtimes, legislative restrictions, limited resources, or patent restrictions. In practice, in 2 years recently, some behaviors abusing firm’s commanding position did appear., such as: The aviation petrol and oil company that belongs to Vietnam Airlines was fined 3.37 billion by the competitive Council because of abusing it’s position to stop selling petrol for Jetstar Pacific, and this broke the competitive law. Besides, the behavior of giving promotional program stretch out freedomly, sale off up to 50% of the price of tickets on so many long-time flights, and not controlling the