Engineering Price Wars - The Cost of a Competitive Behaviour

One industry where Price Wars are prolific is of course the aviation and airline industry. There are historic conflicts which come and go for no one particular reason apart from for business sake. Virgin was driven almost to the brink and beyond during the 90's when British Airways went to war with Richard Branson's new airline start-up, Virgin Atlantic. Since then there have been many more spats, and a noteworthy one was again between BA and Virgin in 2009, which benefited no one, apart from their passengers.

Price wars are defined by a vicious reduction in prices in order to secure more business than their competitors.

So, an unsustainable price war is waged for a short period of time, for the purposes of enticing new customers, or ruining your competitors business altogether.

I think we all understand this. Or do we?