Hot Topic Lesson: The US Airline Industry…Fight or Flight!?

By Greg Caskey,  January 2018

INTRODUCTION:
“It’s time to level the flying field. Spread the word to help enforce Open Skies trade agreements and protect the future of US aviation and American Jobs.” #OurFutureOurFight 

Have you ever been in a situation in which you complained that a good or service has been offered too cheaply? Yes, too cheaply?  Indeed, the question is difficult to understand.  After all, one of the hallmark pillars of a market economy is business competition.  That is, businesses should be able to freely compete with one another through a process of entrepreneurial discovery to see who can best serve the consumer with quality goods and services at a low price.  While this complaint may not be something you’d hear from a consumer, it is certainly an accusation levied by competitors.  In a word, welcome to the airline industry!

KEY CONCEPTS:

• Opportunity Cost
• Incentives
• Institutions
• Concentrated Benefits & Diffuse Costs
• Subsidies

MATERIALS:

Download The US Airline Industry…Fight or Flight!?  classroom materials.

• Essay (Student Reading)
• Student Handout
• Teacher Guide