Summary
1. The new open skies agreement on Airlines Services between the United States and Euope will provide European Carriers greater access to Domesctic US markets. The European Carriers will take advantage of a lower US Dollar compare to the Euro to gain more revenue from advertising a cheap fare to US. 2. Delta must gain more markets in Europe and beyond in order to share in the increaing revenue of this joint venture. Future joint venture must negoiate the beyond Europe markets that has been bloked by European Airlines. 3. The competition will allow the consumer to benefit from low fare as long as there is no price fixing and price increase initiatives that start with one gruop and followed by others.
Analysis
1. The low fares between Europe and the US will increase the flow of revenue in the US from toerism. The increase in purchase power of this export revenue will create a chain reaction in retail goods and real estate industries.
2. The airfrieght industry will also gain from the low fare markets thus increasing exports to Europe and to the Middle and Far East.
3. The increase in revenue may be adjusted by rise of Oil prices and fuel cost.
