D/B/11. The affect of 9/11 (11th of September) on airline industry

This paper analyses the following questions: What has happened to demand for international and European flights? Describe the effects of change in demand on profits of European Airlines. Use a cost diagram to show how a cut in demand can reduce profits. How have European airlines responded to the change in demand in the short term? Product curve diagram is illustrating this answer. What is Robert Ayling's answer to the airline's short-run management problem? Why do Rigas Dognais and Rod Eddington argue that consolidation is necessary for the long run survival of Europe's airlines? Use a long-run cost curve to illustrate your answer? Why has the European Commission favoured blocking cross border mergers and acquisitions between airlines in the past? Is this policy in the consumers' interest? Some airlines have not suffered a profit squeeze. Is this a sign of competition, monopoly power, or something else? Briefly explain your answer.