Macro-economic Factors Affecting Virgin Atlantic Airlines

This report discusses the macro-economic factors affecting Virgin Atlantic Airlines, including inflation and unemployment rates, the impact of UK's current growth rate, government intervention methods, and global challenges faced by the company. It also provides recommendations on how to overcome these challenges in the current time.

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Contents
Introduction 3
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.) 3
How will the UK current growth rate impact on the chosen business (give
reference to economic life cycle, GDP, inflation, unemployment rate)
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How can the government current intervention methods affect the selected
busines? (e.g., fiscal and monetary policies, furlough scheme etc)
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What are the current global challenges facing by the chosen business and
recommendations on how to overcome them in this current time?
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Conclusion 8
References 9
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Introduction
Microeconomics is known as the element of the economics which basically works in
behaviour, decision making as well as structure in the economy. In addition to it economic is
the element of the finances that is linked to the unemployment, output as well as inflation in
the current economy. Every of the indicator of the economic is majorly impacted by the
consumers, government and also by the organization. Where is the crucial influence of the
pandemic COVID-19 in the whole economy of the business as well as of the nation. The
following report is based on the organization Virgin Atlantic airlines which is known to be
the commercial business and it is the airline organization of the Britain which was founded in
the year 1984 and company is also having their headquarters in England. The respective
organization is one of the leading brand that is functioning there flight Rome on an average
32 destination around the world (Sharma, 2019). Moreover to this the following report will
cover about the evaluation as well as the explanation of the macro economic element which
are influencing the end whole functions of the company. Additionally it will cover about the
crucial government intervention techniques which have influenced the industry of airlines
and also it will include regarding the evaluation of the international issues which are
encountered by the respective organization and also the several recommendation will be
provided to the organization in accordance to meet the current situation of the company.
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 economics means to the elements which influence the financial as well as
geographical components that is affecting the whole operations in the regional and also in the
national economy within the boundary area of United Kingdom. This commonly represents
the entire performance of the economy rather than specific group of people or the commercial
businesses (Elangkumaran, and Navaratnaseel, 2021). There are several attributes which
represents the whole working of the specific economy as well of the country. In addition to it
there are several components which are affecting the whole operations and performance of
the commercial business output that are described below in brief.
Inflation: This means to the situation in which rise in the rates of the services as well
as goods. Inflation is the widely utilised as well as it also includes the enhancement in the cost
as well as prices of the goods and living standard that is impacting the entire performance
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within the economy. This is the specific condition in which it is being encounters at the time
when the demand of the goods increases which influencing to the enhancement of the entire
rates of the services and goods in the target market. In case of the chief executive officer of
the respective organization as management warn regarding the information which is
Moving towards to have the enhanced cost in the operations of the business. Because of this
the economy is encountering the problem for supplying the adequate merchandise and it is
leading to enhancement in the raids and the entire sustainability by the economy in the past
few years. In addition to it passengers are encountering problems and because of this chief
executive officers of the respective organization wants that increasing up the old cost of the
aviation fuel that majorly is 4 to 5 times more expensive if it is compared to the entire
conventional fuel that is majorly impacting the budget of the respective organization in the
industry. (Sánchez, 2018)
Unemployment: It means to the condition in which citizens are not able to get the
specific job as they are unemployed. This also involves the several people that are not
working because of various elements as in the past time there is the major influence of the
pandemic COVID-19 and because of it there is high level of unemployment in the entire
nation of United Kingdom. In addition to it the majority of the people Are losing their
employment because of the enhanced level of recession which is creating the entire economy
slow down in the nation. In context to the respective organization Virgin Atlantic
management has laid off more than 40% of their workers which gives the outcome in
reducing the whole expense which was more than 530 million. This is also very essential in
order to make more changes in the whole strategy of their market through which management
can attain the alteration within the economy also. In addition to it it is also analyse that
suitable utilization of the employees which enhances because of hiring of the workers.
In accordance to the above discussion several elements which are linked to the macro
economics as well as also impacted the whole functions of the respective organization Virgin
Atlantic airlines in the economy as it is one of the leading crucial change in the given
expenses because of unavailability of the new workers.. (Jacob, 2019)
How will the UK current growth rate impact on the chosen
business.
It is being evaluated at the United Kingdom as emerging industry because of in which
citizens are attaining appropriate standard of living and also making sure the existence of
there people. With the major influence of the court 19 pandemic the whole performance of
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the economy lead towards the decline which is around the fall of 9.4% in the year of 2020
and because of pandemic people are forced to encounter major public health restriction as
well as the disease in the market (Al-Thaqeb Algharabali 2019). So in the financial year of
the 2021 GDP which means gross domestic product of the United Kingdom was increased
around 7.5% in the economy. There are several methods which are having the major
influence on the whole growth rate of the economic and in context to the respective
organization those approaches are described below in brief.
Economic life cycle: It means to the condition in which the life cycle of the economy
passes by the several levels in the pattern which is cynical and those levels are contraction,
expansion, peak and through. There are several elements that assist in evaluating the levels of
economic life cycle, entire employment situation, interest rates, spending capability of the
consumers and many more. That also assist in evaluating the levels of life cycle of economic.
In addition to it there is the appropriate evaluation of the people regarding the inside and it is
very helpful for the respective company as well As for their stakeholders. In relation to the
organization Virgin Atlantic airlines there are several strategies off the life cycle of
economies that are described below in brief.
 Expansion: In this stage of the economic life cycle refers to the interest rate as well
as economic growth that is basically tends to minimum pressure of inflation increases
and also the manufacturing increasing As well. In relation to the organization Virgin
Atlantic airlines there is the major increment in the inflation because of enhancement
in the demand of the current situation of market as well as increasing the expense of
the fuel (Bosire, 2018)
 Peak: At the time when the development and the growth is that it’s last and maximum
and the cycle of peak 18 to their maximum level because of the imbalance is being
fluctuating within the economy of the country and it requires to be modified and
rectified. This is the element in the company in which they need to level up with the
peak in their entire profitability. In case of the organization Virgin Atlantic there is
the condition of imbalance within their economy because of the pandemic COVID-19.
 Contraction: After attending the level of the peak rectification is done with the
assistance of the specific period of contraction in the development that lower down
the rate of growth and the rate of employment declines in the market area of the
company. It is the level in which whole rectification is being attained by the
respective organizations show that they can minimise the chances of the errors.
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 Trough: In this level of the economic life cycle refers to the economy hitting the
minimum point and the whole development starts to better the functioning of the
economy in context to the organization Virgin Atlantic airlines management usually
initiate to recover from the respective business by examining the environment of their
business appropriately.
Inflation: As because of the inflation encountering with the enhancement rates of the
whole production and it is also is main reason to rise in the rates of the fare of ticket
by that the inflation within the economy of the country as the person is facing by the
alteration in the specific market area. With the announcement in the specific rates of
the fuel it leads to enhancement in the rates of the tickets of the company. (Neog, and
Gaur, 2020)
Unemployment rate: In the earlier time there are several elements that are having
the major influence in the economy as well as in the business. The rate of employment of the
United Kingdom is keep on increasing with the major influence of the pandemic COVID 19
because of it they can make sure the effectual operations of the company.
How can the government current intervention methods affect the
selected business?
They are the people that are having the crucial part such as government that is one of
the main player in the specific market as government have all the governance in order to
make any alteration in the monetary As well as in the fiscal policy of the economy. In relation
to the organization Virgin Atlantic airlines there are several methods of the government
because of it there is the major influence within the economy that are described below in
brief.
Fiscal policy: In it rate of interest means to the equipment that is being determined
the whole inflation rate in the economy of the country. It is majorly influencing the whole
economy from the inflation to other elements in the specific economy. In addition to it it is
the set in which the organization leads to the bubbles in which it is unlikely to the burst of it
because of the inflation in the specific market area. In addition to it there is the enhanced
level of capital which is being utilised that also bring suitably to the another level and the
legal authorities can influence the market. (Bogoviz, Ragulina, and Barcho, 2018)
Monetary policy: It is the policy that is imposed by the legal authorities or the
government and the government have the major control in the policy of taxation through
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which they can shift to the investment in the capital through which management of
government can grant the effectual status through tax in the given market area. In accordance
to the organization Virgin Atlantic management basically concentrate to possess the
appropriate performance by which company can make sure the major fluctuation in the
regulations or the diversification by creating alteration in the policies as well as monetary
values of the company.
What are the current global challenges facing by the chosen
business and recommendations on how to overcome them in this
current time?
There are the crucial recommendation which make sure the effectual operations of the
respective organization but there are also specific issues which are being examined by the
respective organization Virgin Atlantic that they need to rectify and minimise their impact
from the organization so that management can attain their long term goals as well as
objectives in the efficient as well as effective way. Few of the recommendation are described
below.
Nuances of Foreign Politics, policy and relations: This is very basically influenced
by the decision making, policies as well as laws of the company which is being found by the
management that is impacting the material, transportation as well as structure of the
economy. In relation to the organization Virgin Atlantic airlines management are possessing
major losses because of which company can appropriately make sure that if actual operations
but it also leads to reduce the whole working of the organization.
Unemployment: It is basically influenced by the politics, decision making of the
company and law which is being imposed by the leaders of the company as well as
government that also influence the Several elements which belongs in economy such as
transportation, system and material. As more time pass there is several variation in the
economy of the companies. It also lead towards to opposes the extreme growth in the market
area in order to remove the extra work in the company. (Robina-Ramírez, and Human, 2020)
Passenger comfort and experience: In the sector of airlines several facilities is the
part and right of the consumers in order to make them satisfied. There are several issues that
are being evaluated by the organization Virgin Atlantic airlines as these are the main point of
time. Play all specific elements consumer that always be disappointed because of that they
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cannot post by the company so that they can make sure the convenient protection by the
consumers can be positioned.
In accordance to the above discussion it has been recommended to the organization
Virgin Atlantic airlines for evaluating all the measures of safety in order to minimise and
avoid Impact of sector of airlines in the company. In such a way management can better And
enhance the several opportunities of job and they can appropriately make sure the standard of
living of the people as well As for their consumers. It helps the organization in making sure
enhance level of profitability and sales revenue is generated by the organization.
Conclusion
From the above report it has been concluded that microeconomics is the element of
the research that involves structure, full operations as well as economy in the company. There
are several elements which are influencing the whole operations of the business in addition to
it The economic cycle also assist in determining the spending capabilities of the consumer as
well as entire overall consumption of the consumers. Monetary as well as financial policies
assist in analysing the money flow in the specific market area and it has also been
recommended to the organization in order to have the suitable services so that management
can make sure in him stable growth as well as success in the market area..
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References
Al-Thaqeb, S.A. and Algharabali, B.G., 2019. Economic policy uncertainty: A literature
review. The Journal of Economic Asymmetries, 20, p.e00133.
Bhattacharya, D., Islam Khan, T. and Hossain Rabbi, M.M., 2021. COVID-19 and
Bangladesh Macroeconomic Impact and Policy Choices.
Bogoviz, A.V., Ragulina, J.V. and Barcho, M.K., 2018, April. Influence of innovations on
regional socio-economic development. In International Conference Project “The
future of the Global Financial System: Downfall of Harmony” (pp. 1200-1207).
Springer, Cham.
Bosire, E.M., 2018. Macro-economic factors and foreign direct investment flows into eastern
Africa region. International Journal of Economics and Financial Issues, 8(5), p.200.
Elangkumaran, P. and Navaratnaseel, J., 2021. Macroeconomic variables and stock prices: A
study of Colombo Stock Exchange (CSE) in Sri Lanka. Available at SSRN 3886450.
Jacob, S., 2019. Effects of Macro Economic Forces on Corporate Governance Performance of
Indian Companies: An Exploratory Study. Available at SSRN 3491556.
Neog, Y. and Gaur, A.K., 2020. Macro-economic determinants of tax revenue in India: an
application of dynamic simultaneous equation model. International Journal of
Economic Policy in Emerging Economies, 13(1), pp.13-35.
Robina-Ramírez, R. and Human, G., 2020. How macro level foundations influence emerging
micro entrepreneurial activities: the case of South Africa. Entrepreneurship and
Sustainability Issues, 7(4), p.3078.
Sánchez, V.M.G., 2018. Self-employment, knowledge and economic growth: An empirical
study for Latin American countries. Contemporary Economics, 12(4), pp.473-484.
Sharma, A.K., 2019. Macro-economic impact of income support programme for farmers in
India. Journal of Income & Wealth (The), 41(1), pp.177-187.
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