... of scale are consequences of the market structure identifiable for the firms in the industry. The price discrimination exercised might imply either benefit or disadvantage, depending on the demand elasticity of the respective customer group. Altogether the consequences for society might be seen as positive, given benefits like an increase in UK GDP. Nonetheless harmful factors, such as negative externalities from the growth in air traffic, cannot be neglected. Due to the oligopolistic market structure the European airline market has been subject to various restrictions aiming to increase the competition in the industry. 3. The Market Structure of the Airline Industry According to the Competition Commission (2000a), "competition in the airline industry takes place on a number of levels and the relevant market in an examination of airline competition can vary from one case to the next". However, it is very common and indeed simplest to view the industry not as one ...

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