Airline Industry Essay 18

Page 1 of 14

Airline Industry Essay 18

By | Feb. 2007
Page 1 of 14
Airline Industry
Economics is explained as the social science that studies the production, distribution and consumption of goods and services. As a guideline for economics, the used of economic indicators are used as a means of predicting or making a forecast about the economy and the different factors that affect those forecast. In this paper, Team A will study the Airline industry how each of the factors of Retail Sales, unemployment rate, Gross Domestic Product (GPD), interest rates and Producer Price Index (PPI) affects the industry on the domestic and international scale. Over the past few years this industry has been significantly affected by such events as the September 11, 2002 terrorist bombing, the high and escalating prices of fuel and recently the shortage that was caused by Hurricane Katrina in August of 2005. Each of these events were world shaking events and in relations to the micro and macro economics presented a ripple effect that to this day is still being felt. The Airline industry, which operated worldwide, was hit with massive events that affected all economic indicators and almost destroyed the businesses. In the beginning years of economic studies, it was previously thought that economic problems were only caused by non-economic events that only affected the things in that arena. However, with the introduction of Keynesian economic theory, of "everything at once", economist and society began to view that with one change, all things were affected. All businesses began seeing that the market held a variety of interest and the interest in one could drastically affect the interest of another. The government and its economic policies also contributed to how the airlines business either improved or fell. Teams A's analysis of these factors will attempt to show all these factors and how the future of this industry can be predicted from the factors. Industry Overview

In North America alone there are approximately 209 airlines. The...