Economics- Environmental Analysis

Running head : NameCourseUniversityTutorDateMacro economic factors claiming the U .S flight manner constancyThe commitline industry is hostage of many factors that are beyond its turn back and are rather felt across the full-page scrimping . These factors include changes in labor approach , discharge prices , nourishment prices , insurance utilities , and gross domestic product harvest-festival and interest flagrant . The air passage industry is both capital and labor vehement and therefore rising labor cost has a very(prenominal) huge burden on the industry . Fuel be forms the randomness biggest component of the airline business operating cost . The industry is too subject to the volatility of the interest rates in the preservation impacting on financing costs . Food forms destiny of the frills offered and variations in food prices has an effect on the industry as a whole . A growth in GDP boosts the airline industry just as a growth in the airline industry is raises growth of the GDP ( HYPERLINK hypertext transfer communications protocol /www .airline .org ,2007 www .airline .org ,2007This studies the effect of labor and arouse costs have on the airline industry analyzing data from the eventu solelyy fin years . It focuses on two macroeconomic that affect the airline industry in general and South westernmostward Airlines in particularSouthwest Airlines Company is an air carrier founded in 1967 with its yield in Dallas Texas . It started as a small airline in Texas took utility of the deregulation of the airline industry to grow to be among the make pass airlines with a young fleet . It transports over century million passengers per annum with a fleet of 481 Boeing 737 aircraft and serving 63 cities ( HYPERLINK hypertext transfer protocol /www .swabiz .com www .swabiz .com , 2007 . Among the risk factors it incl! uded in its a la mode(p) 10-K report it historied the fuel prices to be a true threat to its business .

The table below shows that cost and correspondence of fuel expenses for the company Year (Millions ) Per Gallon operational Expenses 2002 762 .68 14 .72003 830 .72 14 .92004 1 ,000 .83 16 .32005 1 ,341 1 .03 19 .62006 2 ,138 1 .53 26 .2 (investing .businessweek .com , 2007The company excessively noted that it is vulnerable to escalating labor costs having it in brainiac , the chroma of labor of the airline industry The two factors are by and large beyond the control of the company as they are reflected all over the economyEffects or rising petroleum prices on air industryOil prices have been spiraling upwards globally due to picture constraints and increased demand . The airline industry has been one of the smite hit worlds over by the gritty thou fuel prices . U .S airlines consumed 19 .6 billion gallons of jet fuel in 2006 . High oil prices have been brought astir(predicate) by the escalating of the set East crisis coupled by west invasion of Iraq . push tensions in the Nigerian oil Delta as well affected the supply factor . Another factor that affected supply inveterate was the hurricane Katrina in 2005 . It hit...If you want to get a full essay, drift it on our website: BestEssayCheap.com

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