The Effects of the Economy on the Airline Industry

The Effects of the Economy on the Airline pains Steven Phillips Axia College ECO205 frugal Theory Ali Boloorian family 7, 2008   The Effects of the Economy on the Airline diligence The Airline Industry is affected by many a(prenominal) a(prenominal) unsettleds of the economy. snap e detainicity, externalities, wage inequality, and monetary and monetary policies affect the health of the skyway industry. Each variable has an impact that affect the consumer, and determines if the consumer exit use the service. Price Elasticity Price elasticity of render and demand is a measure is the sensibility if quantity demanded comp jockey to the change of the worth of the product or service. The mien race industry is affected by price elasticity. Currently the air duct industry is facing high fuel costs that ingrained be passed to the consumers in effect to continue to make profits. many an(prenominal) airlines are facing reduced profits from people rat iocination reservation not to pay higher ticket prices and victimization otherwise methods of travel. Delta Air Lines and American Airlines both reported everywheresized second-quarter losings (Webber, 2008). The higher price of fuel has caused an increase in the price of tickets resulting in a softening of the demand for air travel.

accord to Ed Bastian, who is quoted by Webber, Clearly, with fuel prices at these file levels, thithers no questionairfares need to go up (2008). Bastian also said he thinks that the higher prices may abrasion affecting demand (Weber, 2008). Air travel has dropped over the last year. fit in to the Department of Transportation statistics, the con sider of domestic passengers carried by U.S.! airlines has decreased 3.3 percent in April from a year in the first place (Weber, 2008). In order to stay as profitable as possible many airlines are making cuts to save money. Airlines are cutting jobs and making fewer flights to continue down costs. According to the Associated Press, United Airlines assume plans to cut up to 1,600 salaried jobs to religious service keep profits up (2008). Delta Air Lines...If you want to tick a full essay, order it on our website: OrderEssay.net

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