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What is an example of predatory pricing?

A prime example of predatory pricing tactics between two large franchises can be seen in the prescription drug price war between Walmart and Target in Minnesota. Walmart, seeking to undercut the competition, initially began offering certain prescription drugs at well below their price floor.



Predatory pricing in the aviation industry occurs when a dominant airline drastically lowers its fares—often below the actual cost of operation—specifically to drive a smaller competitor out of a shared route. A classic example in 2026 involves a "mainline" carrier dropping fares to "train-cheap" levels (e.g., $15 or ₹999) on a specific regional route where a new low-cost carrier has just started operating. Once the smaller airline, unable to sustain the losses, declares bankruptcy or exits the route, the dominant carrier typically spikes the prices back up to even higher than the original levels. While this "price war" initially benefits the consumer with ultra-low fares, it is considered anti-competitive because it leads to a monopoly in the long run. Identifying predatory pricing is notoriously difficult for regulators because airlines can often justify low fares as "revenue management" during low seasons (like February), rather than a malicious attempt to destroy a competitor.

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