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Airline Industry and Its Economic Outline

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Airline Industry and Its Economic Outline
Airline Industry and Its Economic Outline
Frank L Mannino Jr.
Axia College of University of Phoenix
ECO/205 Economic Theory
May 09, 2010

Airline Industry and Its Economic Outline The question can be is. How has the economy of the airline industry performed throughout the many decades it has been? In addition, what did the industry do as it has gone through many events that have challenged its survival? In this type of industry, we can say that it has seen their share of success in profits but has seen its share of overwhelming down trends. You can definitely consider there is this industry depends on the economy around it and solely affected by it too. The airline industry has seen highs when the demand for their services was increased and the decreases when events had a major impact on their survival of the industry. While there are obvious externalities that affect the outcome of this industry, there is more to it. Monetary and fiscal policies affect the industry. Along with everything that has affects this industry, there is a noticeable wage inequality that has intensified. Over the many decades, this industry has existed; several airlines have declared bankruptcy and struggled to stay alive once on the other end of the bankruptcy. Very few of these chapter 11 filing airlines have truly endured the hard times and succeeded. This industry is facing a financial predicament and the future for the airline industry does not look good. The predicament that these industry faces that were accelerated by external shocks. According to Wilson (2005) the war in Iraq, the terrorist attacks on 9/11, the outbreak of Stars, and the crash of the stock market bubble of the millennium is some of the causes of the financial crisis that the U. S. airlines are facing, which has led to a $32 billion loss for the industry. The rising gas prices are a huge impact on the financial crisis. The cause was not only by the terrorist attacks and other events, but also by a


References: Air Transport Action Group. (2008). The economic and social benefits of air transport 2008. Retrieved March 21, 2010, from http://www.iata.org/NR/rdonlyres/5C57FE77-67FF-499C-A071-4E5E2216D728/0/atag_economic_social_benefits_2008.pdf Gini coefficient (2009) Online. Retrieved March 26, 2010, from http://www.businessweek.com/magazine/content/01_48/b3759114.htm Labor and Workforce Development (2009) system. The Heritage Foundation. Retrieved April 28, 2010, from http://www.heritage.org/Research/Budget/bg2007.cfm Wilson, S March 20, 2010, from http://www.moneyweek.com/investment-advice/us-airlines-hit-turbulence---again.aspx Wilson, T Wilson Group. Retrieved April 28, 2009, from http://www.wilsongroup.com/ecr/case/SouthwestAirlines.pdf
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