Influences of Macro-economic Activity on Virgin Atlantic Airlines

This report discusses the impact of macro-economic factors such as inflation and unemployment on Virgin Atlantic Airlines. It also analyzes the UK's current growth rate and how government intervention methods like fiscal and monetary policies affect the airline. Additionally, it highlights the current global challenges faced by the airline and provides recommendations to overcome them.

Business Management
BMP4003 Business Environment
Assessment 2
Influences of Macro-economic
Activity
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Contents
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Introduction 2
An explanation of two macro-economic factors that the chosen
business will need to consider and the influences these could have
on its business outputs (macro-economic factors e.g., economic
output, unemployment rates, inflation etc.) 2-3
How will the UK current growth rate impact on the chosen business
(give reference to economic life cycle, GDP, inflation,
unemployment rate) 3-5
How can the government current intervention methods affect the
selected business? (e.g., fiscal and monetary policies, furlough
scheme etc.) 5-6
What are the current global challenges facing by the chosen
business and recommendations on how to overcome them in this
current time? 6-7
Conclusion 8
References 9-10
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Introduction
Macroeconomics is the idea which offers with the structure, overall performance, decision-
making and the behavior of the financial system as a whole. Economics consists of financial
output, unemployment price and inflation withinside the market. Such signs of financial
overall performance are efficaciously monitored with the aid of using the businesses,
authorities and purchaser as well. There is the large effect of COVID-19 on the general
running withinside the company. Virgin Atlantic Airlines that's the British airways and
founded is in Crawlway, England in 1984. It is running its flights over 32 vacation spots
across the world. This respective record will cowl the elements of macro-economics and its
effect on the general out of the enterprise, It additionally examine the financial boom price in
UK. Moreover, it additionally examines the modern authorities’ interventions which impacts
the general capability of the enterprise. Lastly, it gets right of entry to the positive demanding
situations confronted with the aid of using the enterprise and point out the legitimate
guidelines so as to conquer withinside the modern time (Culkova, Rosova, and Pavolova,
2020).
An explanation of two macro-economic factors that the
chosen business will need to consider and the influences
these could have on its business outputs (macro-economic
factors e.g., economic output, unemployment rates,
inflation etc.)
Macroeconomics elements are defied as the important thing factors that's an influential fiscal,
geopolitical occasion which might be majorly affecting the nearby and the country wide
financial system of UK. These elements have a tendency to affect the financial system as
entire now no longer simply the selective individuals. Majorly, unemployment and the
inflation are the 2 elements of macroeconomics which might be defined as follows:
Inflation: It is described because the charge of growing fee over a given length of time, It is
largely a vast degree that consists of the upward thrust withinside the charges or the boom
withinside the fee of residing withinside the nation (Dash and Maitra, 2021). It is largely
outcomes from an excessive amount of call for chasing too much less items that's impacting
in boom withinside the charges. According to the Virgin Atlantic CEO, warns the inflation
will pressure big costs. As of the deliver challenges, growing labor fee, charges of flying
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extra sustainably could be felt keenly through the corporation on this yr, the passengers will
foot the invoice. But the CEO Warned that scaling up the whole quantity of sustainable
aviation gasoline this is cutting-edge three to five instances steeply-priced than the traditional
gasoline that immediately hit the wallet of the CEO (Virgin Atlantic CEO Warns Inflation
Will Drive Higher Costs, Fares in 2022). They similarly delivered that the airways now no
longer the who will need to foot the invoice to fly on extra sustainable gasoline that's
absolutely going to be shared through all of the stakeholders.
Unemployment: It refereed to the character who're employable and in search of for the
activity however they're now no longer capable of discover a activity. It consists of the
institution of folks that aren't operating because of effect of the diverse elements. But in
cutting-edge time, there's the primary effect of COVID-19 who's impacting the employment
withinside the UK. As of now, humans had unfastened their activity because of the excessive
recession withinside the financial system. In context to Virgin Atlantic, there's the provider
which turn out to be as lead as feasible at some stage in its first flights for the survival. It laid
off 45% of its employees through which thy decreased the fee base through extra than $530
million. For this agility could be important in the imminent yr a good way to observe the
converting method withinside the marketplace and might effortlessly meet the alternate takes
location withinside the financial system. The tight labor marketplace way that the wages will
upward thrust withinside the flights for the sparkling and proficient humans. They similarly
delivered that 4, five million humans end their activity withinside the month of December
which could flawlessly defines the size of the issue. These elements of macroeconomics have
inspired the general operating of the Virgin Atlantic Airlines and the financial system. The
upward thrust withinside the charges because of boom withinside the fee of manufacturing
and the much less availability of the proficient employees (Davia and Legazpe, 2018).
How will the UK current growth rate impact on the chosen
business (give reference to economic life cycle, GDP,
inflation, unemployment rate)
UK is having the quickest developing economic system as human beings are having higher
dwelling requirements and incomes nicely for the coolest survival. Due to the effect of
COVID-19, it has impacted the commercial enterprise as there may be the big withinside the
12 months of 2020 because of the general public fitness regulations and the pandemic. In the
12 months of 2021, UK GDP noticed the yearly upward push of 7.5% (GDP first quarterly
estimate, UK: October to December 2021). there are positive procedures through which the
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effect of UK monetary increase fee may be visible withinside the Virgin Atlantic Airlines this
is illustrated below:
Economic lifestyles cycle: It is the general country of the economic system which is going
via 4 sages in cyclical sample and which are expansion, height, contraction and trough. There
are elements which enables in knowledge the GDP, hobby prices, purchaser spending and
overall employment enables in analyzing the modern-day degree of monetary cycle
(Economic Cycle,2022). Better knowledge adverts the insights are very beneficial for the
commercial enterprise and the investors. In context to Virgin Atlantic Airlines, there are 4
tiers of monetary lifestyles cycle which might be given below:
Expansion: In this degree, the economic system quite raids increase and the hobby prices
have a tendency to low, manufacturing rises and the strain of inflation will increase. In
context to Virgin Atlantic Airlines, they face the inflation because of the growing call for of
the marketplace location and the growing price of the gas.
Peak: When the increase hit its most prices, height cycle is reached and this additionally
creates a few imbalances withinside the economic system which desires to be rectified. It is
the factor wherein business enterprise stands up the height withinside the profitability
however this additionally ends in create the imbalance withinside the operations of Virgin
Atlantic Airlines.
Contraction: After the Peak, a correction takes place via a particular duration of contraction
because the increase slows, employment falls and the fee stagnate. It is the degree wherein a
correction has been made through Virgin Atlantic Airlines so one can remove the errors.
Trough: It is the factor which the economic system hit a low factor and increase begins off
evolved to get better withinside the economic system. It is the factor wherein the Virgin
Atlantic Airlines begins off evolved restoration from the commercial enterprise through
knowledge the commercial enterprise environment (Gong and Lin, 2018).
Inflation: In UK, the excessive inflation takes location as upward push withinside the price of
manufacturing for the groups ends in will increase the expenses of air tickets which results in
get inflation in the economic system because the human beings are going through the large
extrude in the marketplace. Due to the growing expenses of gas has a tendency to upward
push the expenses of tickets and this get inflation in the UK economic system.
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Unemployment fee: In the modern-day marketplace scenario, there are elements which effect
the commercial enterprise and the economic system. In UK, unemployment has been risen to
the height because of the large effect of COVID-19 so one can rightly guarantees the higher
attention withinside the marketplace.
How can the government current intervention methods
affect the selected business? (e.g., fiscal and monetary
policies, furlough scheme etc.)
There are humans who've recognized the authorities because the primary participant
withinside the marketplace. As the authorities have the potential to made the big alternate to
the economic and economic coverage that have impacted the general capability of the
enterprise. They can rightly increase the foreign money because it quickly booms the
company earnings and the proportion costs however in the long run minimize the values and
this spikes hobby rates. In context to Virgin Atlantic Airlines, there are numerous strategies
of presidency interventions which influences the enterprise are illustrated below:
Fiscal coverage: Interest charge is the any other weapon which regularly use to counteract
inflation. This is definitely because, they are able to spur the financial system person from the
inflation. This additionally results in have the higher offerings to the client as they are able to
drop the hobby charge thru the Federal Reserve that is adversarial to elevate them. It is
largely results in have the better lose withinside the marketplace which has a tendency to
have the higher attention withinside the marketplace with the aid of using which they may be
tending to have the businesses and people to borrow extra and has a tendency to shop for
extra. But this leads belongings bubbles wherein is not like the slow erosion of inflation
withinside the marketplace and the big quantity of capital is being destroyed which deliver
use to smartly to the subsequent stage the authorities can have an impact on the marketplace
(Jiang, He, and Nie, 2019).
Monetary coverage: It is the maximum effective coverage at the equal hand, it's also the
maximum imprecise. The authorities can do a number of the pleasant manipulate with the tax
coverage with the aid of using which they are able to flow capital withinside the investments
with the aid of using granting the powerful tax status. It is the primary attention which
guarantees the large, sweeping modified with the aid of using editing the economic
landscape. In context to Virgin Atlantic Airlines, they may be forces to have the higher
operating with the aid of using resulting the right charge of hobby to the humans with the aid
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of using which the glide of cash may be go with the flow withinside the proper route and
additionally guarantees the higher glide of cash to the buyers and the shareholders to begin
their mission or can increase the airways operations with the aid of using presenting enough
budget to them (Li, Huang, and Song, 2020).
Furlough scheme: As the use of a goes into coronavirus lock-down, entire industries have
floor to the primary halt. The aviation enterprise is giving this scheme to the personnel
wherein they may be giving the transient go away to the personnel because of the unique
want of the business enterprise with the aid of using which the entire business enterprise is
having the higher attention withinside the marketplace. In context to Virgin Atlantic Airlines,
they may be specializing in the enterprise that allows you to rightly guarantees the higher
operating and additionally remove the pointless expenditure to the business enterprise
particularly throughout the difficult time of covid-19. It is the principal attention higher
operating of the business enterprise in order that hi there can rightly guarantees the better
profitability and activity function withinside the marketplace. Th airways business enterprise
guarantees the higher operating of the business enterprise that allows you to manipulate the
price of production.
What are the current global challenges facing by the
chosen business and recommendations on how to
overcome them in this current time?
It is the essential attention which guarantees the higher running of the corporation however
there are a number of the demanding situations that is being confronted with the aid of using
the Virgin Atlantic Airlines which wishes to be rectified with the aid of using the corporation
for you to full-fill them in the ideal way and those are defined as follows:
Nuances of Foreign Politics, coverage and relations: It is usually motivated with the aid of
using the politics, policies, regulation and relationships and the selection is being made with
the aid of using the chief which effect the labor, uncooked material, transportation
infrastructure and the instructional system. In context to Virgin Atlantic Airlines, they have
got face the massive loses for you to rightly guarantees the higher running however has a
tendency to minimize the general running of the corporation and guarantees the higher
running as well (Rao and Zhang, 2019).
Unemployment: Because of the massive effect of COVID-19, Virgin Atlantic Airlines,
dealing with unemployment as to begin with cut-down the activity possibilities withinside the
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corporation because of their massive unfastened and discount withinside the typical
profitability of the aviation enterprise. But after the lengthy time, folks that had been running
on this area are saved to be activity much less in order that regularly modified their career for
you to earn and stay a higher life. If the corporation makes a specialty of the clean operation
so the methods with the aid of using which they could lessen the general running and do
away with the unemployment in the organization. This additionally enables withinside the
higher running for you to guarantees the better profitability with withinside the organization
(Sánchez, 2018).
Fuel efficiency: The expenses had been remained one of the essential monetary things this is
affecting the airways enterprise. It essentially effects the economic portfolio of the airway’s
companies. Due to the upward push withinside the variety of airways corporation, the charges
of gas additionally growing and additionally developing vicious circle. In context to Virgin
Atlantic Airlines, they're dealing with these problems with the aid of using which they're
minimizing the general profitability and sales in the organization.
Passenger consolation and experience: Aviation enterprise is the provider pushed and its
fulfillment is being depending on the pride of the passengers. The assignment that is being
confronted with the aid of using the Virgin Atlantic Airlines is that the no passenger alike at a
few points, unique phase purchaser constantly be upset so that is what driven the corporation
to make sure the seamlessness, wonderful safety and no hassles in airports traces and clean
purchaser care and greater (Taherzadeh, 2020).
It is usually recommended to the Virgin Atlantic Airlines to restart its offerings with the aid
of using the use of all of the protection degree for you to keep away from the negatively
impacting of aviation protection in the organization. Other corporations additionally assist the
corporation with the aid of using investment them for you to rightly resume its offerings and
can also supply numerous employment possibilities in the market. In such manner they
enable each the corporation and the society as enough of activity possibilities enables in
improving the higher dwelling requirements of the human beings and they could rightly
guarantee the higher offerings to the passengers with the aid of using which they could
guarantees greater income to them.
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Conclusion
From the above file its miles concluded that macroeconomics is the department of have a
look at which structure, financial system and the operating of the financial system as a whole.
There are different factors which effect the general capability of the commercial enterprise
and the financial system i.e., unemployment, inflation and monetary out. Economic lifestyles
cycle which enables in expertise the spending power, intake many different elements
withinside the marketplace. Fiscal and economic polices measures the go with the drift of
cash and guarantees the desired hobby charge to the humans as a way to guarantees the
smooth operating and stream of cash withinside the marketplace. Aviation enterprise face the
large effect as they're dealing with the growing fees of gasoline because of the massive
quantity of companies that are running withinside the equal enterprise. Further, it's miles
advocated to the employer to apply the higher offerings through which they could preserve
the go with the drift of products and offerings withinside the marketplace additionally
guarantees the better fulfillment in the imminent year.
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