Impacts of various factors on the airline industry economics essay

Recent event happening in the macro-environment has affected the airline industry significantly. The benefits of transportation improvements are related to the reduced costs associated with transportation.

Macro environment are general environment factors that affect all business within the market.

How do economic issues, politics, and social factors affect the airline industry?

A case study of EasyJet and the airline industry http: From an economic view in the transportation sector, demand can be measured in numbers of journeys made or in total distance travelled across all journeys.

And oil price really matters to the health of global economy. The price elasticity of demand measures the responsiveness, or sensitivity, of the demand for a good to changes in its price when other influences on demand are held constant.

These factors are discussed below. With good roads, rail, air, and information technology infrastructure will give us the desire to live where we want to live, enjoy quality food and goods produced far from our homes, and easily and safely travel from work or relaxation.

Conclusion Among the various political factors affecting airline industry above, there are those that can be handled by the airline companies and those they cannot. The relationship between transportation and economic development is thus difficult to formally establish and has been debated for many years.

In the last fives years, the US has experienced slowed economic growth. It was very difficult if not impossible for entry of new airlines as the regulation hindered competition.

Highway Trust Fund The transportation grant programs funded by the Highway Trust Fund—including the nation's highway and transit programs—have evolved slowly since the Trust Fund was created in In addition to this, a study in Perspectives on Audiology found that the loud conditions encourage passengers to adjust their earphones an extra 5 decibels above the ambient noise to block it out Wanjek Online.

External environment has a great impact on the competitiveness of the firm and this is why a clear understanding of this environment isessential for a firm.

The close substitutes might be a threat of traditional airline company, dominating short journey less than 3 hours However, the rail is hard to challenge low-cost airline company. Every motorized vehicle contains an element of danger and nuisance.

It is crucial for Easy Jet to manage cost effectively so that it can continue to offer competitive fares profitably. In countries where such events are experienced, it is always in the interest of passengers and airline companies to suspend or stop air transport. To make these decisions, it is vital for the origination to understand the macro-economic environment affecting the airline industry.

More low-cost carriers were introduced in the market, plunging airfares lower than expected. In addition, unnecessary cost created by overnight stops could be avoided by base management, in order to improve efficiency and maximize revenue. Since the availability of alternative modes of transportation that are reasonably close substitutes for air transport diminishes with distance travelled, it is expected that the demand for air transport will be less elastic for longer flights than for shorter flights.

About this resource This Economics essay was submitted to us by a student in order to help you with your studies. Essay UK - http: Due to human errors and various forms of physical failures mechanical or infrastructural injuries, damages and even death occur.

Ozone can reduce lung function, increase susceptibility to infection, and aggravate allergy-like symptoms. Long term exposure can also be responsible for heart and lung disease and cancer.

Flying alone can expose passengers to cosmic ray radiation from traveling at high altitudes and close to the North Pole Wanjek Online.

The high mobility in the social cultural environment has led to an increase in the volume of travelers thus providing an opportunity for the airlines.

The most significant political event however has been September 1 1. This in turn exposes the world to tourism, which significantly improves living standards and assuages poverty in many nations.In particular, the market changes in general economic conditions have influenced considerably the airline industry.

Carriers have suffered losses of $50bn over the past 10 years [ 1 ] is the most specific evidence. Locate and read the case starting on page in your textbook entitled “Flying the Competitive Skies: U.S.

Airline Industry,” and respond to the following questions: How do economic issues, politics, and social factors affect the airline industry? What is the financial position of the companies in the airline industry including the impact [ ].

Free Economics essays

Introduction In recent years, affected by natural disasters, emergencies, oil price volatility, the international financial crisis and other factors, especially the oil price, that is the most major factor of the airline cost, and still increasing, made the airline industry’s production decline shaply.

Free Essay: The global airline industry is experiencing cold season since the terrorist attack in Though china’s airline suffered less from the Besides, not all factors may have a direct impact on the industry.

However, the following are some of the main factors that can have significant impacts on the operations of the airline sector. International Trade. The airline industry has played a critical role in the growth of the global economy.

Market structure of Airline industry. There are many factors impacted on the recent poor financial performance of traditional airlines, including the effects of 9/11, the global economic recession, the increasing growth of low cost airlines that operate under a different business model, and the recent surge in fuel prices.

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Impacts of various factors on the airline industry economics essay
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