1. Each month Jacquelyn spends exactly $50 on ice cream regardless of the price. Jacquelyn's price…
Travel agents are affected financially by reduced fares that will result in reduced commissions. On the other hand, American's four-tier structure substantially reduced the number of fares in the database by 86%. This simplification will enable travel agents to better service their customers. Travel agents therefore are both positively and negatively impacted. Small business customers are positively impacted by the fare changes. Previously, the higher full fare prices discouraged small business travel; small businesses would either decide against travel or incur the cost of a Saturday night stay and purchase a reduced fare ticket. By reducing the full coach fares, small businesses will be able to purchase more convenient flights at more economical prices. Large businesses, on the other hand, may be negatively impacted. Since many large businesses had negotiated discount rate contracts with airlines, the new full coach fare may be higher than these negotiated fares. For large businesses that did not have negotiated contracts, the fares will be lower than the previous full fare…
Social: Air travel has been a concern since the event of 9/11. The changes in demographics of customer base and market taste may…
Both business and tourist travel are reduced when the economy slows. “Global aviation traffic typically rises and falls at twice the pace of economic output, so a change in the economy can double the impact for airlines.” Because of relatively high fixed costs of airplanes, airport facilities, and labor, airlines can 't easily adjust to reduced passenger traffic. Based on the financial results on Hoover’s database, the industry has a very low growth rate of personal consumption expenditures as of 2014, and it was forecasted to grow at an annual compounded rate of 4 percent between 2014 and 2018.…
In terms of the four v’s, Qantas experiences a predictable major increase in demand for the school holidays and other major events but also had to cope with major decreases such as the 9/11…
Southwest Airlines is operating in an industry that is struggling to make profits. The slowing economic growth and raising fuel costs are lowering earnings while revenues remain the same. The macroeconomic factors affecting the airline industry include unemployment, the economic growth in the United States, and inflation. With low economic growth, consumers are finding luxury items more difficult to purchase and airline tickets for vacations fall into that category. Unemployment contributes to a lack of vacation travelers since individuals who are not employed do not have extra money for vacation or airline tickets. Inflation also causes operating costs of the airlines to be higher cutting into profits.…
Airplane tickets have gone up for a number of reasons. In the article Why your Airplane ticket is so expensive nowadays the author explains how there are only a few major airlines so less competition means less need for cheaper prices. Airlines have partnered up, merged and some gone out of business, so there are a couple major airlines in the US. The price of air fuel has gone up as well in the last…
Popularity and demand also has an effect on travel times. Due to higher demand, airplanes now fly to more and more places, and more…
Thank you, Robin. Due to lower airfares and gas prices, this year is projected to be the busiest Thanksgiving travel season in eight years. AAA says that 47 million people are expected to travel at least 50 miles from their home over Thanksgiving weekend, 300,000 more people than last year. But with more travel comes more concern over safety, especially in areas of mass transit. After the Paris terrorist attack, security at train stations and airports across the country has seen an increase.…
Unfortunately, all other things were not equal during this time period, demand for jet fuel was further narrowed because the income of airlines also dropped at the simultaneously. The Global Financial Crisis and 2008 financial crisis meant that travelers not only needed but were also left with no other choice but to cut back on their demand for airline travel (Amadeo, 2014).…
3. Rising gas prices has lead to direct increase in airfares which consequently leads to decrease in travel and tourism.…
Americans hit the road most often during the traditional Thanksgiving and Christmas holidays and the summer vacation months, so successful travel firms have adapted their operations to take advantage of these seasonal highs and lows.…
General economic trends are important in forecasting sales in the airline industry. The overall health of the economy is an important factor affecting the extent of business travel. In addition, the health of the economy, safety concerns, and income levels affect the extent to which the general public travels by air.…
Based on data from the International Air Transport Association, a trade association for the world’s airlines, average airfares across the globe have gone down by at least 12% in 2015 and has continued…
Indeed, air business is reaching historic highs, but flight delays are too. During 2006, more than 23% of flights were either late or cancelled. If it is not an overbooking situation, it is weather, if it is not weather, it is a malfunction; the possibilities are unlimited. Even the Federal Aviation Administration (FAA) is aware of the situation, but its actions are virtually useless. The delays will not only be the same, but are expected to worsen up during the next coming years (“on-time”, 2007).…