Virgin Blue - Fighting National Champions

Published 01 Jan 2004
Reference 5179
Region Other Regions
Summary

This case describes the turmoil in the Australian airline industry, after the entry of low cost carriers Virgin Blue and Impulse in 2000. The events led to a dramatic consolidation by 2002, with fears of even greater threats to competition than before deregulation. The case looks at the challenges to industry regulators, as well and the companies involved.

Teaching objectives

This case highlights the complex competition dynamics in industries with barriers to entry, such as the airline industry, stressing the implications for competition policy and the process of deregulation. In such industries, the activities of top management are directly inter-related with the actions of policy-makers. Hence this case can be used in discussion about economic policy as well as business strategy.

Keywords
  • AR2004
  • AR0304
  • RD0104
  • AIRLINE INDUSTRY
  • PRICE WARS
  • DEREGULATION
  • COMPETITION POLICY