The Airline Industry

Paper Summary:

In this article, the writer discusses economies of scale and scope with regards to the airline industry. The writer claims that more so than in any other industry, economies of scale and scope are vital to the health and well being of the airline industry. The writer explains that economies of scale ensure that organizations are able to increase output while minimizing increases in cost. The writer discusses tactics and techniques for achieving and maintaining economies of scale and scope. Specific attention is also given to the future of the airline industry with a special focus on British Airways and their achievement, with respect to economies of scale and scope over time.

Table of Contents
Introduction
Economies of Scale and Scope
Tactics Businesses Use to Compete to Win in Business or Survive
Conclusions

From the Paper:

"Economies of scale are often considered the lifeline of an organization, particularly large multinational organizations like those involved in the airline industry. Economies of scale are nothing more than an economic "property of production" that explains what happens to cost when an entity increases the quantity of input by a predetermined amount. If costs increases with increasing quantity of input then economies of scale are not created; if costs however increase more than quantity of input diseconomies are created whereas economies of scale are created when cost increases less than quantity of input factors, suggesting an organization is making positive gains."

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