As a result of the restrictions on travel, the Airline Industry is in financial distress. Use the data below to answer questions
Firm % of MarketAmerican 17.6%Delta 17.5%Southwest 16.9%United 14.9%Alaskan 6.4%JetBlue 5.5%Spirit 4.2%Frontier 3.1%SkyWest 2.9%Hawaiian 1.6%
Explain why this industry is considered an oligopoly using the characteristics of the industry, the 4-firm
concentration ratio and the current Herfindahl-Hirshman Index.
Extra Credit: What if (hypothetically) United needed to merge with another airline in order to stay in
business. Would the government be more likely to approve a merger with SouthWest or with Spirit? Use
the post merger HHI’s to justify your answer.
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