The Opportunity

• Analyze claims of monopolization and collusion regarding refusal to use new airports by major carriers.

The Challenge

• The economics of the airline industry has led to the hub-and-spoke system in order to gain economies of scale among other reasons.
• The decision not to use a new airport involves many factors that need to be analyzed.
• The challenge is to incorporate airline economics into a model that analyzes the use of new airports and determine whether the decisions made are pro- or anti-competitive.

The Solution

• A decision-making model was developed that analyzed the profitability and causes thereof of opening up stations in new airports.
• A test of whether a collusive decision was made was carried out.
• Data analysis of prices and quantities helped determine market conditions and damages.

The Deliverables

• An Expert Report and Rebuttal Report were submitted to the court on behalf of the client.

The Results

• The case settled after both reports had been submitted.
• The client was pleased with the results and felt that the final outcome was positively influenced by the economic analysis.

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