Final answer:
Middle Eastern carriers Emirates, Etihad, and Qatar Airways are a competitive threat to U.S. airlines due to lower fares, better service, and broader destination networks. They benefit from strategic hubs and luxury amenities that attract customers. U.S. airlines face challenges due to industry consolidation and aggressive competition tactics.
Step-by-step explanation:
Emirates, Etihad Airlines, and Qatar Airways pose a threat to U.S. legacy carriers because they offer lower fares, better service, and more destinations. These competitive advantages come as a result of various factors, including state-of-the-art air fleets, luxurious in-flight amenities, and strategic geographic positioning of their hubs, which all contribute to their appeal.
The U.S. airline industry has seen reduced airfares and increased efficiency owing to deregulation, which has also led to the development of hub-and-spoke systems allowing greater service to more cities. However, recent mergers among U.S. carriers have raised concerns about compromised competition. The aggressive pricing strategies of large airlines, meant to counteract new entrants in the market, can lead to reduced competition over time.