Student’s Last Name 1
1. The American airline is less competitive compared to the European airline market
because of the following: (1) barrier to entry of foreign investors beyond the 25% voting
shares threshold; and (2) shortage of take-off and landing slots at America’s airports.
Moreover, the American airline market does not respond proportionately to changes in the oil
price because the largest shareholders in each of the big four airlines are also the five biggest
fund managers in America. This discourages the carriers from competing vigorously. To
improve the market condition of the airline industry in America, the appropriate regulatory
agencies should consider easing out the barriers to entry of foreign investors to invite more
shareholders into the existing airline companies, and to encourage the formation of new
