The proposed merger of British Airways and Iberia shows types of economies of scale very nicely. Economies of scale occur when a firm grows larger its long run average costs fall. If we remember the mnemonic we used for types of economies of scale - Really, Fun, Mums, Try, Making, Pies, we can then apply this to the merger.
Risk bearing, Financial,Marketing, Technical, Managerial, Purchasing
Willie Walsh said “Both airlines will retain their brands and heritage while achieving significant synergies as a combined force.”
Using this article find some of the economies of scale that the merged company will benefit from.
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