Factors that cause effects on the airline industry

Factors that cause effects on the airline industry Introduction: Airlines overcome substantial strategic, financial and operational risks. In particular, the market changes in general economic conditions have influenced considerably the airline industry. Carriers have suffered losses of $50bn over the past 10 years  [1]  is the most specific evidence. Thus, this paper studies changes in four major fields confronting the airline industry including market forces, financial risks, government policies and global events as well. Simultaneously, this study illustrates different revenues to be derived from these points. Structure of this paper seeks to contribute in this way. After introduction, section 2 provides a theoretical analysis of market forces. Section 3, 4 and 5 describe the effect of financial risks, global event and government policies respectively. Finally, section 6 concludes the study. Analysis Market forces: First at all, the global airline industry faced intense impact as a result of the market forces of supply and demand. In fact, the change in demand is one of the most important factors which affected to the airline industry. The initial variable that can shift demand curve is income. In other words, if the passengers have the high income, obviously they will be able to get the tickets more in replacement of choosing car, train, etc. As a result, their demand to go by plane will definitely rise. However, over past 10 years, due to the global economic crisis, income has been decreased substantially which brings in the decline in demand of customers. This is illustrated by the Figure 1 below. Figure 1: Decline in demand Similarly, the wage of employees in the airlines industry has been varied considerably in the recent years. For instance, approximately 78% of employees at San Francisco Airport made under $10 per hour but this amount increased of 33% when there was a higher living wage ordinance  [2]  . All things said, the airline industry has been influenced frankly by incomes of their passengers and their own employees wages. In term of supply, input price is the essential variable to shift the supply curve. Indeed, fuel price is one of clear example. Because jet fuel costs comprise a significant component of airline operating cost, the airline industry also has been affected. While short term cash flows are related to changes in the fuel price which make revenue be slow initially, much of the price effects are likely to be passed on as all airlines face similar fuel costs in the long term. Indeed, there was an argument that airlines also face an underinvestment problem whenever profitable investment opportunities arise during times of high jet fuel costs.  [3]  About technology, due to the stronger development of technological system, the supply of world airline industry also rises. As a result, there are a huge number of both new and old airlines can provide the demand of customers. In term of competitors, if an airline sets up the higher price, they will obviously loss a large number of passengers at the same time which results in a lower revenue. The specific example is the differences in percentage of passenger seats sold (load factor) of 9 U.S airlines including Delta, American, United, Continental, US Airways, Southwest, Alaska, Jet Blue and Air Tran since they are competitors of each other. This following figure 2  [4]  describes this Figure 2: The rest variables also play an important role which affect to the demand curve of airline industry including tastes, expectation, technology and number of buyers or sellers but the most necessary factors are still the first two variables. Elasticity of demand is also the essential factor that influenced the airline industry. Indeed, competition consistently affects the price of airline tickets because it gives customers other options. When the demand is elastic, price and total revenue will be negative and when the demand is inelastic, price and total revenue will be positive. And this explains why the loss and earnings of world airline industry vary substantially. Hence, the table 1  [5]  below shows the annual loss and earnings of airline industry from 1990 to 2005 and figure 3 describes the annual net profit of the world airline industry  [6]  . Annual Loss and Earnings 1990 $   3.9 billion loss 1991 $   1.9 billion loss 1992 $   4.8 billion loss 1993 $   2.1 billion loss 1994 $   0.3 billion loss 1995 $   2.3 billion profit 1996 $   2.8 billion profit 1997 $   5.2 billion profit 1998 $   4.9 billion profit 1999 $   5.4 billion profit 2000 $   2.5 billion profit 2001 $   8.3 billion loss 2002 $11.0 billion loss 2003 $   2.4 billion loss 2004 $   7.6 billion loss 2005 $   5.7 billion loss Figure 3: Annual Loss and Earnings Figure 4: Financial risks: There are three factors that cause financial problem for airline industry: fuel price, interest rate, currency rate. Fuel price: In general, fuel price always plays an important role in the world economy. That is the reason why either increasing or decreasing of fuel price affect deeply on airline industry. It is easy to see that fuel and airline are complements. Airline cannot operate without the existing of fuel. Gasoline, oil, or other products from crude oil are utilized as irreplaceable fuel in airline industry. According to the theory, complements are two goods for which an increase in the price of one leads to a decrease in the demand for the other  [7]  . A change in price of fuel will shift the demand curve. In the other hand, assume that fuel is input and airline transportation is output. Rising in input price leads to a leftward shift the supply curve. The following diagram describes how fuel price causes a change in both demand and supply. Figure 5: Changes in both Demand and Supply Based on the diagram, when price of fuel increases from P1 to P2, the quantity demanded and quantity supplied decreased an amount computed by (Q1 Q2). As the result, both demand curve and supply curve shift to the left. Airline market reaches a new equilibrium E2. Applying those theories into the reality, the annual report 2009 of IATA stated that the surge in fuel prices in the first half of 2008 meant fuel represented more than 50% of many airlines operating costs  [8]  . By year-end 2009, crude oil prices had risen 85%, to $74 a barrel, as economic recovery began to raise demand and as futures markets, anticipating strengthening economic recovery, added to upward pressures  [9]  . Figure 6: Fuel price throughout the year, 2010  [10]   Higher jet fuel prices automatically eat into airlines profits; meanwhile improved economic conditions are boosting passenger numbers. For instances, in 2004, many nations including British Airways, had already added fuel surcharges to ticket prices or raised fares to counter higher fuel costs. Many of Asias major carriers, including Singapore Airlines, Australias Qantas, Malaysia Airlines and Indonesias Garuda had also introduced surcharges  [11]  . Fuel price cannot remain a stable status for a long run period then airline industry should be flexible to react quickly. Interest rate: Interest rate is other factor that effect on market economy in general and airline industry in particular. The interest rate connects the price of goods today and their price in the future. Higher interest rate increase expected cost of distress and this is particularly so for the airline industry where leverage is high and distress costs are substantial. Exchange rate: Exchange rate risk is important as airline profitability is related to currency values. Tourism demand is one of reasons that show how exchange rate cause changes of airline industry. Both inbound and outbound are influenced by exchange rate levels. When the exchange rate is high, tourist will receive benefits. The result is they are willing to travel more, thus, quantity demanded of airline tickets will be increased. In contrast, the depreciation of domestic currencies make tourists consider whether they should travel or not. Travelling in recessive period is a typically example. If the exchange rate falls down, customer might save their expenditure by not travelling or they might wait for promotion tickets. It means that foreign demand for international and domestic flights move inversely with the value of the home currency  [12]  . Global events The airline industry in the world has many changes every year. The more global event has happened, the more the affection has an effect on the airline industry. In 2001, after the terrorization 11/9 happened, the industry of airline decreased very quickly. Follow the number of airline industry, US airline posted they have net loss $7 billion. 20% staffs and employee lay off by US airline. The number of passenger reduce continuous and have criterion recovered in 2003  [13]   Figure 7: US Airline industry passenger revenues 1999 2004 Beside, the price of oil have effected on this industry. When the price of oil increase, the fees for material grow up .If the airline do not rise up the price of ticket, they will decrease their net profit. If the price of oil falls off, there are more than promotion tickets for passengers. Moreover, the disease can be affected to the industry .Example, when the SARS disease happened, many countries have not allowed passengers to come to place where SARS disease has. Government policies The government policy is another factor what can be effect on the airline industry. Because the government policy control on price, so the airline industry have 2 legal price such as price ceiling and price floor .The price ceiling is a legal maximum on the price at which a good can be sold  [14]  . For example, a airline has good quality, so they want increase fees. The price ceiling applied to fees to help people can be paid. When the airline wants to attracted passenger, they create promotions about the price their ticket. So the price floor is the price minimum at which ticket can be sold and the company airline still has net profit. P Surplus S E D 0 Q Figure 8: Taxes is a important factor of the government policy .When the taxes of the passenger increase ,the price of ticket rise up , so if the airline industry want to grow up, they need decrease another fees in ticket. When the taxes of the airline industry increase, the price of ticket will increase or the industry will cut off something to protect their profit. Conclusion: The above analysis showed that factors like market forces, financial risks, global events and government policies cause effects on airline industry. In order to overcome and continue develop own airlines, carriers should seek a suitable way. In details, by successfully managing opportunity cost, and adapting to an ever changing economic environment, airline industries can have economic success. However, the well-being of the nations economy will have a direct impact on the level of success experienced in the airline industry. During economic shortfalls in the nations economy, travellers will have fewer resources available to travel for pleasure. Contributing to the negative economic influences in the airline industry, future and existing policies targeting the airline industry will continue to hinder the industrys ability to recover losses in periods of economic hardships.

What Is Mice? Search for Its Potential for Vietnam Tourism

Topic : WHAT IS MICE? SEARCH FOR ITS POTENTIAL FOR VIETNAM TOURISM. ***************** MICE is one of the most developing kinds of tourism, not only in the world but also in Vietnam. To many people, it is really a new conception. MICE tourism means travelling in combination with attending meetings or conferences. MICE stands for Meeting, Incentives, Conferences, Exhibition. According to travel firms, MICE tourism can bring turnover six-fold higher than other kinds of tourism as MICE delegations always consist of several hundred travelers who have big budgets and use many kinds of services.MICE is now a kind of tourism that brings great income to the tourism sector of many countries. Destinations in Singapore, Bangkok, Jakarta and Kuala Lumpur have become familiar with MICE tourists, therefore the World Tourism Organizationwants to discover a new destination in Southeast Asia such as Vietnam. As you know, Vietnam is not only famous for the friendly people, the special food, the nationa l character, the hidden charm but also a very peaceful country.So, being a peaceful country is really a strong-point of MICE tourism in Vietnam. Moreover, Vietnam is on the way of integration process. Thataâ‚ ¬Ã¢â€ž ¢s why there are many meetings and events organized to co-operate in business, set up relation and consolidate friendship with other countries. Besides, MICE is also attractive to the Corporate Entertainment as it brings them greater income than any other kinds of events as well as helps them to advertise their brand-name to people from different countries easily.As you can see, Vietnam has many advantages to develop this kind of tourism. Therefore, MICE industry becomes new development trend in Vietnam. However, Vietnam should be more flexible with the market field of vision, concentrate on training the staffs to serve tourists in the best way. In the future, Vietnam will no longer become the best choice for MICE delegations in the world.

Possible Danger Signs on Nroc Camouflage Analysis Essay Samples You Must Know About

Possible Danger Signs on Nroc Camouflage Analysis Essay Samples You Must Know About The History of Nroc Camouflage Analysis Essay Samples Refuted Morality has a collection of unsolved problems, the solution on which usually presents a selection. A writing service may also be hired to make an example document. It is a rather solitary act that needs to be supplemented with social activityand I do not mean typing a response on a social media platform. Nroc Camouflage Analysis Essay Samples - What Is It? Introduction is a rather important portion of the academic paper too. Technology can be challenging to comprehend, particularly if you use too many terms that might be unfamiliar to your audience. Naturally, when deciding on your process analysis essay topic you'll want to give it some serious consideration, especially in case you wish to opt for a successful one to write about. You should offer information which is pertinent to your thesis. There are a lot of topics to choose at and dissect. Don't panic whenever your instructor tells you that you must compose an analysis! The Number One Question You Must Ask for Nroc Camouflage Analysis Essay Samples As you finalize your topic choice, be certain to select a process you've completed many occasions and you can explain to another person. Among the biggest areas of analyzing an ad is looking closely at the folks in it. Take your time to cautiously examine our cause and effect topics list till you locate a prompt that you're excited to write about. An easy step-by-step site setup guide is an excellent way to talk about your wisdom and ideas with the world. The Advantages of Nroc Camouflage Analysis Essay Samples Nerdymate s, the most trustworthy essay writing service on the internet, provides a chance to receive guaranteed great essay. Be mindful of the size it must be and begin writing the narrative essay outline. When you compose the rhetorical analysis essay, keep in mind that its principal purpose is to explain the effect of every system that was used by the author. Evidently, writing an essay on this issue of marijuana is too general. Students are often scared of rhetorical analysis essays because they don't know how to write them. Once a student finds a completely free example, it is impossible for them to turn it into the teacher. Even if he understands the general concept, they may still be unable to write a causal analysis essay. Vital Pieces of Nroc Camouflage Analysis Essay Samples You can imagine a process analysis for a mechanism description set against a process of chronology and understandable sequence. Therefore, process analyses can be quite detailed and at times quite long. When you haven't already mastered the process, it'll be tricky to learn and compose all at one time. Alternately, you can imagine unconventional processes. In order to cut rework initiated by the customer Colorscope would want to improve customer interaction during the approach. Although management may expect auditors to examine such practices, they should clarify the degree of the work they intend to carry out. When collectively the new product is going to be scrutinized, collective decisions will be produced also. Whereas there has being major milestone in the business of medicine, the procedure for natural selection hasn't been affected. Ideas, Formulas and Shortcuts for Nroc Camouflage Analysis Essay Samples It is an impossible task to produce a good, impressive introduction before you know the remainder of the paper's content. The process essays are generally written for companies or people who need tutorials. Don't be afraid to get some additional assistance to turn your paper stick out! There are several methods in which you are able to write a rhetorical paper. It's interesting that lots of students write introduction after they've written the full paper. Rather than plagiarizing the totally free content, students may employ a writer or a writing service to finish their essay in their opinion. Searching the Web Students can easily locate an example paper by searching the web. Literature students read a good deal. Getting the Best Nroc Camouflage Analysis Essay Samples Ensure you make an exhaustive interpretation of each process in the most fascinating way so to capture the interest of your reader. Therefore, it's ok to receive a bit personal here and convey your viewpoint. At exactly the same time, detecting cause and effect relationships isn't that easy in regards to the selection of a great cause and effect essay topic. If you don't understand the problem, you've hardly any opportunities to succeed. Work on it once you're done with the body paragraphs. You can find with new ideas for young girls who aspire to become one if you'v e got the present of style. The introduction usually starts out with some type of background details. Just pick the category which suits you best and tackle because many topics as possible.

How to Make Colored Flowers

Its easy to make your own colored flowers, especially carnations and daisies, but there are a couple of tricks that help ensure great results. Heres how you do it. Tips Materials: Light-colored flowers, food coloring, waterConcepts illustrated: Evaporation, cohesion, xylem, capillary actionTime required: Few hours to a dayExperience level: Beginner Colored Flower Materials Fresh flowers, preferably white: Dont use wilted flowers, since they might not be able to absorb water well. Good choices include daisies and carnations.Food coloringWarm water You can use other colors of flowers besides white. Just keep in mind that the final color of the flower will be a mix of the natural pigments in the flower and the dye. Also, many flower pigments are pH indicators, so you can simply change the color of some flowers by putting them into water with baking soda (a base) or lemon juice/vinegar (common weak acids). Steps for Making Colored Flowers Trim the stems of your flowers so they arent excessively long.Make a slanted cut at the base of the stem underwater. The cut is slanted so that the stem wont sit flat on the bottom of the container. A flat cut can prevent the flower from taking in water. Make the cut underwater to prevent air bubbles from forming in the tiny tubes at the base of the stem, which would prevent the water and color from being drawn up.Add food coloring to a glass. Use about 20 to 30 drops of food coloring per half-cup of warm water. Warm water will be taken up more readily than cold water.Set the damp stem of the flower in the colored water. The petals should become colored after a few hours. It may take as long as 24 hours, however, depending on the flower.You can set the colored flowers in plain water or flower preservative, but they will continue to drink water, changing the pattern of the color over time. Getting Fancy Slit the stem up the middle and put each side in a different color to get bicolored flowers. What do you think you will get if you put half of the stem in blue dye and half in yellow dye? What do you think will happen if you take a colored flower and put its stem in the dye of a different color? How It Works A few different processes are involved in plant drinking, which is called transpiration. As water evaporates from flowers and leaves, the attractive force between water molecules—known as cohesion—pulls more water along. Water is pulled up through tiny tubes (xylem) that run up a plants stem. Although gravity might want to pull the water back down toward the ground, water sticks to itself and these tubes. This capillary action keeps water in the xylem in much the same way that water stays in a straw when you suck water through it, except evaporation and biochemical reactions provide the initial upward pull.