Theme:- Changi Airport authorities must promote Airlines by giving them rebates in landing charges and office rentals to increase traffic on airport.
Article selected for discussion:- “Changi must extend Lifeline”, THE STRAITS TIMES, 14 November 2009
Main points in the article:-
Firstly SARS Virus hit the aviation industry in 2003 and currently economic downturn is pulling it back. •
Changi Airport authorities are giving aid to airlines like discounts on landing charges, rebate on office rentals and few cash incentives too. •
Situation has been improved a bit as compared to the last year. Passenger traffic grew by 6 percent in September as compared to last year. •
Even though these numbers have not added cash to the bank accounts of the aviation industry. Passengers are growing but not in the Business and First class, which generates more revenue in comparison to Economy class. •
Worldwide, airlines are expected to lose US$11 billion (S$15 billion) this year and another US$ 3.8 billion next year, according to a forecast by the International Air Transport Association. •
Other countries like Malaysia, Hong Kong and Thailand are also providing relief packages for airlines. •
To stay ahead in the competition, Changi must keep offering something good to the airlines.
Concepts Discussed in the article:-
Demand - The amount of a good that buyers are willing and able to purchase. •
Elasticity - A measure of the responsiveness of quantity demanded or quantity supplied to one of its determinants’. •
Market - A place where suppliers and consumers meet.
Perfect Competition - A market with many buyers and sellers trading identical products so that each buyer and seller is a price taker. •
Common Property Resource - Resources accessed through social and legal institutions that ensure sharing of benefits from the resources. •
People respond to incentives - One of the Ten Principles of...
Mankiw N.Gregory, 2009, Principles of Economics, South-Western Cengage Learning.
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