Interpreting economic data - taking off: the development of the air travel industry in the United States
Most products go through a life-cycle with certain common features across a wide rangeof different industries. In the early stages a new product has relatively few outlets and isoften viewed as a luxury item by consumers. Sales are therefore low and prices are highwhen it first appears on the market. However, as the product becomes established,production methods are standardised, costs and prices fall and it gradually takes on thecharacteristics of a mass-market good. This leads to a period of rapid growth which levelsoff as sales reach the potential capacity of the market. At this time the market maystabilise or even go into a period of decline as rival products enter the market or as lowcost foreign competition replaces domestic production.In this article we will discuss the product life-cycle for domestic air travel in the UnitedStates. This is an interesting industry because air travel has only existed for about the lasteighty years and so we have accurate statistics which allow us to trace out itsdevelopment from an infant to a mature industry. The plan of the article is as follows. Inthe next section we seek to identify the key stages of transition for this industry. This isfollowed by an assessment of the effects of the business cycle on this market in its maturestage of development. Finally, we present some overall conclusions and some questionsfor further discussion.
Year of publication: |
2004
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Authors: | Turner, Paul |
Publisher: |
Phillip Allan Updates |
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