I'm well aware of the legal definition of collusion, thank you.usairways_vote_NO said:First off you need to know the legal definition of collusion.
Of course not. However, all parties raising fares in concert is significant evidence toward a collusion charge.All airlines (parties) raising fares in itself doesn't constitute collusion any more then all airlines lowing fares.
No, not all parties have to participate. However, only two parties participating (when there are more than two in the market) will rarely produce the desired effect.Also it can apply to two parties all parties do not have to participate for collusion to occur.
It can, but it's usually far easier to prove the predatory pricing charge than the collusion charge in that case. Hence why you won't see collusion charges when fares are lowered.Collusion can also apply to lowering fares if it involves lowering fares to get rid of competition by selling under cost of doing business.
I apologize if that was your inference. My intent was to suggest that WN's fares would be higher were it not for the hedging. They'd still retain pricing power in certain markets, but not to the degree that they currently do.Southwest's advantage in the market is not only their fuel hedging as you seem to be implying.
Patently false. It is one reason, but far from the only reason.The only reason they have a fuel hedging advantage now is because they already had other advantages over the other airlines not because of the hedging in itself.
In cost, yes. However, the legacies do still retain a degree of pricing premium over WN. This is why I was saying that WN's pricing power erodes without the hedging. Right now, AA has a much better cost structure than they did in 2001. Combined with their premium offering, they would have an opportunity to compete effectively against WN were it not for the additional competitive advantage of hedging. The same could be said for CO.When all is said and done taking out all costs for fuel Southwest will still beat the legacys hands down.
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