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The Charlotte American Airlines Monopoly Essay (Article)

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Updated: Apr 25th, 2021

  1. A fortress hub is a location where large amounts of airline traffic concentrate, and a single airways company controls most of that traffic.
  2. More than 90% of the passengers at the Charlotte airport use American Airlines, and the average domestic fare is $407.30, which is 21% more expensive than the national average. Furthermore, the price is decreasing, but at a significantly slower rate than at other airports, which are experiencing a similar trend.
  3. Lower prices benefit passengers because they have to spend less money on transportation, assuming the company in question upholds the same quality standards as before the reduction. The increased attractiveness of airline travel to passengers leads to an increase in traffic, ultimately increasing the benefits for airports from parking, retail, and ticket fee revenue.
  4. Charlotte is the most profitable American Airlines hub, but it does not have significant growth potential. Lowering the prices would attract more local travelers and reduce the number of people who bypass the airport because of the high fares. Furthermore, it could be done without affecting the service quality due to the high initial profit margin.
  5. If competition reduces the level of service, the major airlines that have to deal with other companies now may kill the hub. The loss of corporate flight traffic would have a massive influence on the airport’s profitability, as the potential local traffic is often not enough to maintain the standards established by previous, large-scale patterns.
  6. The costs of air service development include the construction of new gates and accommodation spaces, including lobbies and restaurants. The benefits include an improved ability to handle traffic and better customer satisfaction due to lessened crowding and shorter restaurant lines. Charlotte is constructing nine new gates and expanding its overcrowded areas in a nine-years rebuilding plan.
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IvyPanda. "The Charlotte American Airlines Monopoly." April 25, 2021. https://ivypanda.com/essays/the-charlotte-american-airlines-monopoly/.

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IvyPanda. 2021. "The Charlotte American Airlines Monopoly." April 25, 2021. https://ivypanda.com/essays/the-charlotte-american-airlines-monopoly/.

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IvyPanda. (2021) 'The Charlotte American Airlines Monopoly'. 25 April.

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