The Airlines Conduct during the Crises of 2001/2003

Part of the Contributions to Economics book series (CE)

One of the conclusions of Chap. 3 was that, non-flexible carriers, i.e. carriers with high adjustment costs, typically present a small reaction to short- and long-term variables. This behaviour results from the fact that a non-flexible carrier sets high capacity levels during the crisis to push its competitors out of the market and to reduce the set-up costs of re-entering. On the other hand, flexible carriers present high responsiveness to both short- and long-term profitability. As described in Chap. 3 in the North American and the Asian crises, the typology of the shocks and the characteristics of the markets were different. Nevertheless, the empirical analysis of both crises should confirm the theoretical results presented in Chap. 3 that there is a trade-off between short- and long-term goals among carriers for both the first and the second crisis.


Adjustment Cost Capacity Supply Asian Crisis Asian Market Black Diamond 
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© Physica-Verlag Heidelberg 2009

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