What do you think will happen to air ticket prices?

Answer the following questions regarding the airline industry. Present you answers as a report of no
more than 2000 words. The report should have an executive summary, an introduction, a body, and a
conclusion. Ensure that the report is referenced correctly, and all diagrams labelled. Any late
assignments will incur a 10% deduction per day. In concluding your report, make a recommendation
back to the government in whether they should help certain players in the industry and why.
1. Analyse and evaluate the market structure of the airline industry. In your analysis, determine
whether the current market is concentrated or not. In your discussion, use economic tools or models
to make this decision. You should also consider who owns Jetstar when making these calculations.
2. With the events of COVID-19, there is a possibility that Virgin Australia may fold. Assuming this
market share will be taken up by QANTAS, calculate the new HHI for the industry. What do you think
will happen to air ticket prices? Explain and justify with relevant economic concepts
3. A couple of States, including NSW, are expected to help bail out Virgin Australia. Do you think this
will be good for the industry? Do you think it will be good for Qantas?

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