Econ 6000 Case Study Hwn
Microeconomic Analysis of Hawaii’s Inter-Island Air Transportation Market
Malia Preza
ECON 6000-AW Fall 2014
Hawaii Pacific University
Abstract
The Airline Industry in Hawaii is an integral part of life for many residents. Rural communities throughout the island chain depend of reliable interisland transportation services for essentials like emergency health care and a way to stay connected with family members living on different islands. Hawaii is a geographically isolated chain of islands located in the middle of the Pacific Ocean. The state of Hawaii is comprised of 8 main islands to and from which locals and visitors travel. Hawaii’s dependence on tourism, its local culture, and the lack of close substitutes for inter-island travel (or any substitute for that matter) have made the airline industry a primary focus for State legislation and public initiatives. Significant changes occurring in recent years following the 9/11 terrorist attacks have caused much speculation about issues related to high fares and restrictions. The present study attempts to analyze key events though a microeconomic lens and discuss relevant implications (i.e. oligopolistic market structure and behavior). Supply/demand equilibrium and cost analysis is used to identify how decisive actions involving major players in the airline industry have impacted its stakeholders.
Microeconomic Analysis of Hawaii’s Inter-Island Air Transportation Market For many Hawaii residents, inter-island travel is a part of life and has almost become synonymous with airline transportation. It is also very important element of the Hawaiian tourism industry and has played host to a multitude of visitors from all over the world since its inception. However, over the past decade there have been numerous changes affecting Hawaii’s inter-island airline industry which have affected travelers. Major problems impacting consumers of this commodity revolve around
Malia Preza
ECON 6000-AW Fall 2014
Hawaii Pacific University
Abstract
The Airline Industry in Hawaii is an integral part of life for many residents. Rural communities throughout the island chain depend of reliable interisland transportation services for essentials like emergency health care and a way to stay connected with family members living on different islands. Hawaii is a geographically isolated chain of islands located in the middle of the Pacific Ocean. The state of Hawaii is comprised of 8 main islands to and from which locals and visitors travel. Hawaii’s dependence on tourism, its local culture, and the lack of close substitutes for inter-island travel (or any substitute for that matter) have made the airline industry a primary focus for State legislation and public initiatives. Significant changes occurring in recent years following the 9/11 terrorist attacks have caused much speculation about issues related to high fares and restrictions. The present study attempts to analyze key events though a microeconomic lens and discuss relevant implications (i.e. oligopolistic market structure and behavior). Supply/demand equilibrium and cost analysis is used to identify how decisive actions involving major players in the airline industry have impacted its stakeholders.
Microeconomic Analysis of Hawaii’s Inter-Island Air Transportation Market For many Hawaii residents, inter-island travel is a part of life and has almost become synonymous with airline transportation. It is also very important element of the Hawaiian tourism industry and has played host to a multitude of visitors from all over the world since its inception. However, over the past decade there have been numerous changes affecting Hawaii’s inter-island airline industry which have affected travelers. Major problems impacting consumers of this commodity revolve around
References: Bonham, Carl & Gangnes, Byron & Zhou, Ting, 2009. Kyle Hampton & Katerina Sherstyuk, 2010. Farnham, Paul G. Economics for Managers. Upper Saddle River, NJ: Pearson Prentice Hall, 2005. Print. Kyle Hampton & Katerina Sherstyuk, 2010.