Pricing strategy in a duopolistic market: aviation industry in Middle East

2014-05-07As developing economies in and around the MENA region (Middle East and North Africa) are growing rapidly, the market for aviation industry in the region is also expanding rapidly. Currently Emirates Airlines and Turkish Airlines are the leading commercial and cargo carriers in the region. Both airlines are growing rapidly and competing with each other especially in long distance flights, which are the most profitable. This study examines how each firm reacts to a price change by the other competitor either increase or decrease their airfares in response to the other, in such a way as to optimize their profit. This study aims to analyze the pricing strategies for both firms in this duopolistic market using Bertrand model of game theory and its implications in this particular market