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For a student, a grade of' 65 percent is nothing to write home about. But for the airline [industry], filling 65 percent of the seats

"For a student, a grade of' 65 percent is nothing to write home about. But for the airline [industry],

filling 65 percent of the seats ... is thedifference between profitand loss. The [economy] might lie juststrong enough tosustain all thecarriers on a cashbasis,

but not strong enough to bring any significant profitability to the industry. For the air- lines..., the emphasis will be on trying to consolidate routes andraise ticket prices..."

The airlineindustry is notoriousfor boom andbust cycles. Why is airline profit- ability very sensitiveto these cycles''Do you thinkthat during adown cycle thestrategy to consolidate routes and raise ticket prices is reasonable? What would make this strategy succeed or fail?Why?

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