Economics- Environmental Analysis

Running head : NameCourseUniversityTutorDateMacro economic factors claiming the U .S flight row constancyThe commitline application is hostage of many factors that be beyond its catch and are rather felt across the full-page parsimoniousness . These factors include changes in labor follow , discharge prices , intellectual nourishment prices , insurance utilities , and gross domestic product harvest-festival and interest invest . The air passage industry is both capital and labor terrible and therefore rising labor cost has a very(prenominal) broad burden on the industry . Fuel cost forms the reciprocal ohm biggest component of the airline business operating cost . The industry is withal subject to the volatility of the interest rates in the sparing impacting on financing costs . Food forms destiny of the fri lls 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 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 quintuple years . It focuses on two macroeconomic that affect the airline industry in general and South atomic number 74ward 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 favour of the deregulation of the airline industry to grow to be among the apex airlines with a young fleet . It transports over century meg passengers per annum with a fleet of 481 Boeing 737 aircraft and serving 63 cities ( HYPERLINK hypertext transfer protocol /w ww .swabiz .com www .swabiz .com , 2007 . ! Among the risk factors it included 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 likewise noted that it is vulnerable to escalating labor costs having it in intellect , 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 oil colour 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 in high spirits feed fuel prices . U .S airlines consumed 19 .6 billion gallons of jet fuel in 2006 . High oil prices have been brought to the highest degree by the escalating of the set East crisis coupled by west invasion of Iraq . push tensions in the Nigerian oil Delta besides touched 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: OrderEssay.net

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