We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Airline Sales Plunge Blame Low Fares - Essay Example

Comments (0)
Summary
Name: University: Course: Tutor: Date: Airline sales plunge? Blame low fares Introduction Supply and demand is one of the basic economic concepts which form the backbone of the free market economy (Wessels 10). The quantity demanded refers to the quantity which the buyers are wiling and able to purchase at a given price and at a given period in time…
Download full paper
GRAB THE BEST PAPER
Airline Sales Plunge Blame Low Fares
Read TextPreview

Extract of sample
Airline Sales Plunge Blame Low Fares

Download file to see previous pages... Unlike the demand curve, the supply is positively related to the price hence the higher the price, the higher the quantity supplied to the market. At market equilibrium, the quantity demanded is equal to the quantity supplied hence there is absence of excess demand or excess supply in the market (Wessels 28). The quantity demanded is determined by several factors which include the income levels of the consumers, the price of the commodity, the price of related commodities, the future expectations of changes in price and the population. The quantity of commodity supplied in the market is determined by the price of the commodity, technology and the prices of inputs of production. The supply is also determined by subsidies and government taxation (Wessels 58). This paper will discuss the airline sales plunge which may have been blamed on the low fares. The paper will examine the effect of the recession on the airline industry. Research questions and methodology The paper will answer the questions on what were the causes of decrease in the quantity demanded of airline tickets. The paper will also answer the question on the effect of the fares charged on the cost or price which was actually paid by passengers. The paper will review articles on the impact of low fares on profitability of Airline industry during the recession. The airline passenger sales revenues declined by 19 percent in September year-to-year which was not attributed to lack of business but the low passenger prices for the fares. The number of passengers who travelled during the period also declined slightly by 2 percent according to the Air transport association while the average price per one mile of flying declined substantially by 18 percent (Smith 2). The scenario can be explained by the low demand in the airline industry. The fees which started to be charged on services which came free initially include the checked baggage fee, pet travel, non-alcoholic drinks and food. The extra fee accumulated to $ 1.15 in 2009.bsome of the major carriers like U.S Airways, Delta Airlines and Continental Airlines gained about $ 10 surcharge revenues for holiday travels while maintaining their normal fares. The decline in Airline industry profitability was also affected by the increasing prices of crude oil (Smith 2). The decline in the quantity demanded of the Airline industry fares during the recession can be attributed to the decline in consumer income levels. A reduction in the income levels would lead to reduction in the quantity of goods demanded especially goods which are not basic. The recession led to decrease in the number of tourism travels and other leisure related travel hence the Airline industry had to lower their prices in order to attract and retain customers during the recession. The low fares partly attracted demand since the passenger volumes fell by 2 percent but it negatively affected business profitability since prices of inputs like crude oil increased. The prices of other related transport services like ship transport did not increase hence the airline industry had to lower their prices so as to maintain their customer base (Smith 4). The recession negatively affected the global economic and business environment whereby major multi-national companies scaled down their operations hence the volumes ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Ryanair the low-fares airline (Stratigic management)
A SWOT analysis will be carried for the airline. The report will also discuss the company’s financial analysis, strategic capabilities, strengths and weaknesses. The findings reveal that Ryanair’s low cost/low fare model has given it a competitive advantage in the budget airline industry.
8 Pages(2000 words)Assignment
Sales
It has been supposed that "Sales Ethics is an Oxymoron", along with that's how many individual perceive it. It's not an Oxymoron, other than organizations that expand an Ethics agenda for the incorrect motives could, in actual fact, generate a status that is precisely conflicting to their intention.
6 Pages(1500 words)Essay
The low-cost Airline Ryanair
Porter’s Five Forces Model makes it easier for one to analyze these various factors in relation to any industry, as it outlines the basic factors, which one should observe to understand a company’s chances for success and market attractiveness.
3 Pages(750 words)Essay
Independent Study: Marketing strategies of low cost airline in Japan - Skymark Airline
Skymark Airline faces significant obstacles and hurdles in areas such as partnerships, network and aircraft configuration. This paper seeks to discuss the marketing strategies of Skymark Airline. Skymark Airline expects to continue with its profitable run throughout its fiscal year.
8 Pages(2000 words)Essay
Blame
Although I myself have never become religious I had always perceived Islam to be a religion that preached good things and how to live a respectful life. I saw the “imams” to be wise and upstanding members of society that had humanities best interests at heart. Some of the most admirable and dedicated people I know are Muslims.
7 Pages(1750 words)Essay
An analysis of how 'management via accounting' can be applied to keep fuel costs as low as possible at a low-cost airline, w
Faced with high fuel cost volatility, scarcity in fuel supply, and high complication in future forecasting demand, many passenger airplanes are looking forward to capture financial savings and good organizations towards fuel procurement, cost risk hedging, and fuel management via accounting.
3 Pages(750 words)Essay
Airline Operations
The old airlines, set within what are now inefficient ways are also facing new competitive threats from companies such as JetBlue, SouthWest Airlines and a host of other airline start-ups that have managed to minimize costs (Ben-Yosef, 2005, p. 24). In recent years the events of 9/11/2001, in which two planes were flown into the World Trade Center, one into the Pentagon and one into a field in Pennsylvania had a devastating effect upon the financial circumstances of the airline industry, an effect from which they have yet to fully recover ((/11 Commission, 2004) .
10 Pages(2500 words)Essay
Write a detailed marketing strategy for WizzAir low cost airline
Secondly, it is using a targeted marketing strategy that is aimed at getting the customer segment that is used to travel by trains and buses to shift to airlines. This customer segment is apparently wary of low cost air
10 Pages(2500 words)Essay
The evaluation of the methods used by US Airline Company to increase customer sales in the competitive market
The approaches for this research and justifications for the same are enlisted in subsequent topics; this includes data collection and analysis methods, and the research experience. Airline companies operate in a homogenous business
3 Pages(750 words)Essay
Examine the Rivarly among existing competitors and the threat of substitute product in low cost airline industry in Europe
High intensity of competitive rivalry in an industry results in competition and this reduces the profit potential for the existing farms. Conversely, low intensity of competitive rivalry in
5 Pages(1250 words)Essay
Let us find you another Essay on topic Airline Sales Plunge Blame Low Fares for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us