The Airline Industry Impacts On Economy

1773 words - 7 pages

The airline industry has had many affects from the economy. This paper will explain how the economy has affected the airline industry by explaining the shifts and price elasticity of the supply and demand; as well as provide information about the positive and negative externalities. The monetary and fiscal policies have had several different impacts on this industry and this paper will explain that along with the wage inequalities occurring throughout this industry. The first part and most important part of this paper is the positive and negative externalities, following that is the monetary and fiscal policies, then you will find the information key to this paper: the shifts and rice elasticity of supply and demand, and the inequalities to which have occurred. Also included in this paper are some extra impacts to which have occurred due to the economic changes which you may find very informative. The conclusion at the end of the paper will review everything read and give my opinion on the impacts which have occurred due to the economic changes and many other situations which may affect the economy.EXTERNALITIES:The airline industry fluctuates in price due to many positive and negative externalities. "Events such as, "The September 11th Tragedy" affected the airline industry very negatively. The airline industry depends on the transactions from buyers due to high overhead costs. Work and labor weigh heavily on profits, and determine the lifespan of many airlines. The airline industry can be viewed as a natural monopoly, but there is clear evidence that states otherwise. While it is difficult to classify, it depends on the circumstances, which will be discussed further into this analysis," stated InnovatedThinker (2007) p2.The airline industry is highly affected by the externalities. Some externalities that are exclusive to the airline industry are crashes and some receive more publicity than others. Other externalities that exist are high overhead costs. The state of the economy, will always play a huge role in determining the direction the industry will go. These externalities have been the cause of some airlines not surviving. The globalization of our economy is affected by the state of the airline industry in the end (Jerram, 1998).Due to the airline industries market dependency it is very unstable. Positive and negative externalities affect the entire industry and this makes many airlines unable to remain profitable. The externalities can affect the customers, the global economy, employees, other airlines, and many others. The classification of the airlines industry is debatable due to the nature of the industry itself and its customers. Many sources can agree to the fact that it should not be classified a natural monopoly. The airline industry will continue to swerve up and down according to the market conditions, and the same externalities will be in existence (InnovatedThinker, 2007).Labor equals one fourth of the airlines operating...

Find Another Essay On The Airline Industry Impacts on Economy

Economic Profile: The Airline Industry Essay

1710 words - 7 pages economy and the market is strongly dependant on the airline industry. (Dillon& Nickerson 2003) The rise and decline in fuel costs is another negative externality that affects the airline industry. Fuel costs have been on the rise for quite sometime, so all though begrudgingly, have grown to accept the change.The luxury to travel is a common good. There only a designated number of seats available on a plane or cabins available on a cruise ship

Industry Overview of the Airline Industry

1562 words - 6 pages raises this means that an economy or country has increase its production of all goods and service. This results in more income, which in return results in more expenditure on domestic or foreign flights for the airline industry. . A rise in GDP also results in increase investment, which means that the entrepreneurs would invest more money or capital into the airline industry. An increased GDP also means an increased ability for the government to make

Modelling paper on airline industry - management system

2979 words - 12 pages based on integer programming can be implemented.The report finds that a system such as the one described requires a critical understanding of the factors which influence the industry and the company as well as strong support from the management team, from both a financial and process stance to be successful.1 Dilemmas facing CoolJetCoolJet is currently experiencing significant problems with its check-in staff scheduling system. The

Tourism impacts on environment, economy and society

2256 words - 9 pages negative impacts that tourism makes, this major industry must be controlled by the authority tightly.In order to reduce the negative impacts of tourism on the economy, there are a lot of issues to work on. But what I recommend is, Government needs to control the international tourists and its private sectors.There should be presentations and notes given out to tourists beforehand, which will increase their awareness of protecting the environment. Eco

Impacts of Wyoming’s Agriculture on Economy

1490 words - 6 pages million acres. The state brings in more than $1 billion in receipts each year from the farming and ranching industry.”(ICF International in partnership with Link WYOMING, 2) From the words, we can see the importance and necessary of agriculture to Wyoming’s culture and lifestyle. What is the more important point is that the economic effects of agriculture. Three positive impacts of Wyoming’s agriculture on economy are contributing to economy directly

The Effect of the Iron Industry on Alabama’s Economy

1379 words - 6 pages economic life of the south” (Griffith, Alabama: A Documentary History to 1900). Before the Civil War Alabama’s economy many depended on agriculture and a work force of slaves. A new south had been created that brought “free labor and greater diversification” (Griffith, Alabama: A Documentary History to 1900). This is in part due to the boom in the iron industry. Mills and mines had existed before the war, although not as influential as they became

The Effect of a Struggling Economy on the Auto Industry

1399 words - 6 pages industry, Canadian and the American auto makers were hurt the most. The strong presence of unions meant that they had a much higher labour cost than their competitors. Also General Motors, Ford and Chrysler, known as the “Big Three” primarily focused on manufacturing pickup trucks and SUVs because of their high profit margin. Sales plummeted when the fuel prices drastically increased and consumers could not or would not get a loan to pay for a new car

The Structure of the Airline Industry

2577 words - 10 pages tourism. Air transportation is characterized by network attributes, high fixed costs, highly unstable demand as well as the need for great expertise and great emphasis on safety. It is therefore vital to look at the innovations behind the evolution of the airline industry & review what lies ahead in the future for their survival.Three innovations by major carriers in the 1980sIn the ever competitive era of the airlines industry, established

Economic Profile of the Airline Industry

2346 words - 9 pages unstable due to the immediate reaction to tragedies. The airline industry was affected following the September 11th tragedy and it affected other industries indirectly. The airline industry plays a key role in globalizing our economy and the market is strongly dependant on the airline industry. The rise and decline in fuel costs is another negative externality that affects the airline industry. Fuel costs have been on the rise for quite sometime

An Analysis of the Airline Industry

1132 words - 5 pages My industry analysis will be about the airline industry. Nature of competition The airline industry is in a state of oligopoly, bordering onto the state of imperfect competition. The various aspects that have a bearing on the nature of competition will be covered subsequently. Imperfect information. There is imperfect information about the airline market. This can be gauged by the fact that airlines are never sure as to what is the exact

Analysis and Recommendations for the Airline Industry

3119 words - 12 pages Association reported that the airline industry suffered a net loss of $8 billion dollars during 2008 (wikinvest). The current failures are most affected and influenced by competition, buyer power, technology, and the economy. While it is evident that the airline industry is suffering as a whole, there is one airline that is flourishing with achievement amongst the failing industry. Southwest airline's unique way of operating has generated a consistent

Similar Essays

Economic Impacts On The Airline Industry

1858 words - 7 pages Economic Impacts on the Airline IndustryOver the years we have been able to see how airline travel has changed. From the deregulation in 1978, to the terrorist attack of 2001, government regulations have created much of the changes (2007). How has these changes affected the supply and demand in the airline industry? Has this created positive or negative externalities? How has this changed the wages for the workers? Have monetary and fiscal

The Airline Industry Essay

1551 words - 6 pages industry profitability has been volatile. High airline fixed costs, significant operating cost sensitivity to fuel prices, and the sensitivity of international travel to business and political conditions make airline profitability depend significantly on macroeconomic factors.Economic & structural changes have greater impact on the air line industries. For example, September 11th attack affected the whole economy & the airline industry as

The Economic Effect Of September 11th On The Airline Industry

603 words - 2 pages financial aid package designed to help the crippled airline industry. "A safe, visible and effective commercial air travel system is important to America's economy and to our way of life," is one statement made by a representative to the House soon after this package was passed by Congress. When I first heard about this relief effort it made sense to me why the government would do this. First of all, business and trade rely strongly on the ability to

Impacts Of Trade Unions On The South African Economy

2400 words - 10 pages “Trade unions in South Africa play a significant role in the economy. Trade unions have been active in responding to the fiscal policies of government. Unions argue that their proposals for the budget will increase economic growth and support job creation. Criticism of trade union views on the budget has focused on the affordability of these proposals, and on their impacts on business growth. Will trade union alternatives on the budget support