Analysis of Macro-Economic Factors Affecting Virgin Atlantic Airlines

This report analyzes the macro-economic factors that can influence the business outputs of Virgin Atlantic Airlines, including inflation, unemployment rates, and government policies. Recommendations are provided to overcome challenges such as fuel costs and customer experience.

Individual Business
Report

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................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.......................................................3
How will the UK current growth rate impact on the chosen business?.......................................5
How do government's present day interference methods affect the selected businesses?...........6
What are the ongoing global challenges that the business would face? Give recommendation
for overcoming these challenges.................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The report prepared as under takes in account the concept of Business environment which is
being influenced and impacted by various elements as well as factors that are present in the
surroundings. These elements might affect and impact the demand and supply prevailing and
existing in the economic conditions of the environment. It explains what is being pricing strategy
of the business existing in the business. This might influence proprietors interest in indirect
manner influence the financial change, proprietors interest and state run in formation and
administration of the workforce. Macroeconomics policies would take into account various
aspects which would help in finding, gathering and identifying monetary related policies,
unemployment and rates prevailing in the economic environment (Adelopo, Lloydking and
Tauringana, 2018). In the stated report the company which is being taken into consideration and
account is Virgin Atlantic Airlines which is being established and developed by Nik Powell and
Richard Branson. The company which is being established deals in Virgin occasion, virgin
aircraft and virgin media and so on. In the report below it concentrates over the examination and
analysis of wide range of elements which would be influencing the working of Virgin Atlantic
Airline which would consider expansion, UK developed rates, Unemployment rates, GDP and
flow circumstances as well.
MAIN BODY
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
A macro-economic factor can be termed as an influential financial, natural and political
situation that generally influences a territorial or domestic economic system. These factors
generally lead to influence wide track of individuals in the surrounding and not just a few
persons. The examples of these factors are the rate of unemployment, the high prices, economic
results. These factors are looked and monitored very closely and attentively by the government
authorities, individuals and the businesses in the country as they have the influence of these
factors in their working. The macroeconomic factors can be positive, negative or neutral having
their individual and different effects and influence on the receiver’s end.
The managing department of Atlantic airlines is influenced by a number of factors which are
initiation assistance or selected objectives in the research. Virgin Atlantic also began the world-

wide courier from London to Falkland Island in 1984. Macro plan of actions have influenced the
airlines functioning and methods sanctioned by the organisation (Akadiri and et.al., 2020). Few
of the causes are represented here which has caused changes in the enterprise of the Airlines:
1. Inflating Economic Cost: The inflation rate is the relative upsurge in the cost of the
commodity in a period of time. Enlargement is that portion of economic system in which
large scale monetary elements concern to the inflated prices. This increase in the prices
affects the development in the economic scenario and deals with an important part related
with the keeping up of the growth and development a a constant pace. Inflation leads to
the surge in the prices of the products being produced and sold within the economy which
leads to a further increase in the standard of living for each and every person. In this
scenario the cost of travelling of the establishment will inflate due to the increase in
labour costs and management expenditures that will increase the gross cost amount of the
business. Many difficulties and halts are faced by the management that occur in the
distribution of products and administration services. With an increase in the expenditure,
the ticket cost also increases and this leads to a decline in the number of travellers with
the airlines. The elementary requirement of any airline is the fuel necessity for the travel
which due to this has become very expensive. The information of the travellers is
exploited by the airlines and also by its partners to track down the location and
whereabouts of the passengers and can utilise this for target marketing with the intent to
gain the number of passengers which will lead to an increase in the sales of company
(Alnawmasi and Mannering, 2019).
2. Rate of unemployment: This implies to the number of people who are up for a job but the
chances for them to get the job are very less. In short this defines the workforce that is
ready for the job but are not able to find and have one. This situation arises when the jobs
available in the economy are less or limited and the number of people who are
unemployed and are in search for a job. One more reason for the absence in the desired
number of jobs in the last 2 years is the pandemic. Corona virus also played a prime role
in the increase in the search for a job seeker as people who were having a job prior to the
pandemic have also lost their jobs due to COVID. The level of unemployment has
augmented in the last 3 years due to the pandemic and the state of the market also is very
unlikely to what is desired by the public. The expenditure of the company is around $531

million. This has led to an upsurge in the employment expenditure of the company as the
staff of the airlines has also increased.
How will the UK current growth rate impact on the chosen business?
As per the various sources, it shows that growth rate of economy of UK has increased by
7.5% in the year 2021 and GDP of the economy elevated by 1%in the 3 month. UK is a
developed economy has a high financial position therefore have high competency of growth and
development at a greater pace. Covid-19 has shown great effect on all organization, positive
effect was on the healthcare industry which showed a high growth and productivity while the
other industries suffered a huge loss of productivity and revenue. Data available shows that there
is decline of 9.4% in the non-medical company (Diop, Asongu and Tchamyou, 2022).
Economic life cycle: Every economy has a 4 stages for growth process namely construction,
pinnacle, development incorporates development and box. taking example from virgin airlines
to understand life cycle.
 Expansion: In this stage the business's production is high, interest rate is low therefor
pressure on inflation is high.
 Peak: peak is a stage where the growth is its highest level, creates emplace in the
economy.
 Contraction: correction period when the employment and production falls and price
becomes stagnant.
 Trough: when the productivity reached to the lowest and growth which is declined starts
to recover (Evans, 2018).
Gross domestic product (GDP): It is a measure for calculating the monetary value of the goods
produced in the economy over a period of time. In UK it is 1% in the 2021 for a month. The
reason for 1% increase is stated due to tourism and travel according to the study.
Inflation: A period in an economy where the price of the goods and services in the market
increases, due to rise in demand and shortage of supply in the market.
Unemployment: A phase of economy when there is a lack of employment people are with no
job. In UK there is unemployment due to lack of vacancy in the market.

How do government's present day interference methods affect the selected businesses?
There are people who are observed to have played a prominent role in the marketplaces,
the reason for this is that they have the potential to change the policies and work environment
which would consider monetary and fiscal and also take into account the overall operation based
functions of the economy. It also helps in amplifying the currency and the upsurge in profit and
interest as well. In context of Virgin Atlantic Airlines there are a shade of various policies of
government authorities which impacts the business. The various methods are as follows:
 Monetary policy: it is also referred to a set of actions which helps in controlling the
amount of funds which is available in the economic environment and also directs the
channel that supplies new currency. In other words, it can be defined as the instruments
which are administered by the central banking system for taking a good care of the rates
such as supply, demand, money, and the interest rates as well. It can also be elucidated as
a money supply which diminishes when the rates are changed. It is set by the Central
Banks and modify the interest rates as well as money supply (Hang and Huy, 2021).
Virgin Atlantic Airlines focuses on effective operation and working that can help the
business by stronger alteration of monetary based policies. Virgin Atlantic Airlines would
be measuring the enhancement in working and can predict the interest rates of individuals
and see that the funds are moving in the right directions.
 Furlough scheme: It deduces towards the leave which are temporary and are bagged by
the workers and employees for distinct needs or situations, it can also be due to
commercial situations of the job holders either long term or short term. This program has
been arranged and emerged in order to support employees who are working in Covid-19
related circumstances and are taking interim leaves due to risk factors. In context to
Virgin Atlantic Airlines, the managerial level employees will be benefited by this scheme
of taking interim leaves. This system is further beneficial for the airlines to acquire
enhanced performance and operation from the employees which is favourable for the
organisation. This is the technique where employees are able take leaves and still
enhancing the working as well as making profits for the business. It is a win situation for
both employees as well as the business.
 Fiscal Policy: This is a policy or plan of action that is used for the government tax based
policies and disbursement to create economic related surroundings which takes into

account inflation, growth, goods and services and demand for employment. According to
the present budget balance post, it suggests that the combination between the two or three
has been predicted that the overall GDP is exceeding by 3% while the government meets
the rule by 5% of GDP. This policy is perceived to target the government debt and also
assessment of government's current budget.
What are the ongoing global challenges that the business would face? Give recommendation for
overcoming these challenges.
The ongoing global challenges that the Virgin Atlantic Airlines could face would be the
changes that can happen in the economic environment which would affect the functioning and
operations of the business entity. The problems that could be face in the environment would be
of change in climate, pollution, lack of education, unemployment and many other problems that
can be caused (Kohlscheen, Mojon and Rees, 2020). Mostly these were the issue which were
faced during COVID and is expected to the company that these will overcome it.
 Fuel: This is defined as the gross rate and cost of the fuel is inflating on a regular basis
which can be determined to be the extra cost for the airlines. This leads to an increase in
the financial operations of Virgin Atlantic Airline. This is the main cause for the
increment in the fuel prices that lead to a major influence in the overall gross profitability
of the airlines (Lindemann, 2020). As the number of airlines company all around the
world are many, hence the increment in the fuel cost is understood. With respect to
Virgin Atlantic Airlines, they can work on reducing their profitability and can achieve the
revenue and source of income for the airlines. This problem is being faced by many
airlines and companies across the globe. Experience of travellers: For an airlines business, the comfort and customers travel
experience plays a significant role as the clients working across the industry perform their
functions throughout the airlines business worldwide. Virgin Atlantic Airlines caters and
renders greater amenities to the employees and its travellers and aims at higher
satisfaction from them as it would prove to be of a great assistance in attracting more
clients and passengers from variety of sources. The company should also make a plan of
action to render services to its passengers and workers according to their needs
necessities and wants and should provide and plan its services accordingly. This will

further lead to the growth of business in terms of revenue and would help the future
prospects of the airlines flourishing.
 State of Unemployment: This is defined as the state in which the individual is without a
job, this has been defined to increase with the after-effect of COVID-19 as many
employees, labourers and workers have been removed from their jobs or employment.
The decrease and failure in the employment has affected the airlines business and has
reduced the overall yearly profit of the organisation (Nathaniel and et.al., 2021). The
chances and possibilities available to the businesses in this environment are very low than
the amount that is desired in the present scenario. The airlines need to establish and
modify the available working opportunities and situation for the betterment of the
employees of the airlines as it would prove to be beneficial for them and would help them
achieve their desired results.
CONCLUSION
The report prepared can be elucidated as Macro financial aspects is designated as that part of
inspection which is focused and interested with the economic yields, loan costs, unemployment
prices, loan related expenses, costs and so on. In a way there are several effects of influencing
the business in general sense. In the above report, a company has been chosen to assess the
general economy of the business which can be estimated by its GDP and development of
economy. The public authority's current mediation tools and approach would affect the
economic policies and plan of action which would blend monetary based approach and financial
arrangement. There are additional types of Global changes that would affect and shape the
company through natural issues like environmental changes, impurity as well as climate. Such
developments can have an impact on the company due to increase in the fuel expenses which
results in misuse of funds. The review also tells about the powerful administrations which are
helping the business for efficient use of resources. The financial decision would assist in
examining the associate's chances for further progress.

REFERENCES
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