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Essay Details:
Essay text:
Major airlines such as Delta, United and American offer a substantially similar
flying experience to the customer, even though they try to differentiate by focusing on features
such as frequent flyer programs and legroom. Given their hub-and-spoke systems, these airlines
tend to fly to the same cities and tend to appeal to business travelers who have the least price
sensitivity. This commodity-like quality intensifies rivalry by engendering price-based
competition. Additionally, the industry is extremely sensitive to economic cycles. When the
economy contracts business travel declines, which is particularly adverse for airlines insofar as
corporate travelers display relatively price-inelastic demand...
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