Is the U.S airline industry have the characteristics of an oligopoly?
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In an oligopoly, there are a few sellers for the entire industry. These sellers are also known as oligopolists. For most oligopolies, any decision one seller makes, is influenced by what the response and reactions of the other parties in the oligopoly will be.
There are several oligopoly's in the US. The oil and media industries are two examples, and some consider the mobile telecommunications market an oligopoly as well.
Oil and aircraft are two industries that also have worldwide oligopolies, since the markets are very difficult to enter, and the costs of starting a business in one of those industries is very high.
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There are just too many airlines to be considered an oligopoly. In addition, airlines frequently get into price wars, causing unprofitable conditions. That's not something that typically happens in an oligopoly.
However, there are similarities. The barrier to entry into the airline industry is extremely high. And players in the industry do try to work to maximize profits, and strategically plan when their price changes go into effect. But even with these similarities, they simply cannot be considered one.
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