COMMERCE 4SD3 Lecture Notes - Lecture 2: Canadian Airlines, American Airlines, Cash Flow
17 Jul 2017
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Document Summary
Canadian airlines case 4pa3: what is the difference between a regulated and deregulated industry, in a regulated industry, canada transport commission has the authority to license new routes, exit from current, establish fares, routes, schedules and m&a. In a regulated market, companies do not have a free will to compete and must instead get routes and prices approved by regulators. For example, policy (cid:498)division of the skies(cid:499): many independent carriers existed in areas that were not in interest for the national carrier. Only if the ca carrier was not sufficient, the competitor would have his license approved for the route. Threat of new entrants: low too much capital cost. Buyer power low too many buyers and conversion cost can. Buyer of suppliers medium to high not many suppliers that make. Exhibits 3 and 4: choose and defend either plan a or b.
