Influences of Macro-economic Activity on Virgin Atlantic Airlines

This report analyzes the influences of macro-economic activity on Virgin Atlantic Airlines, including the impact of UK's current growth rate, global challenges, and government intervention methods. It also provides recommendations on how to overcome these challenges.

Business Management
BMP4003 Business Environment
Assessment 2
Influences of Macro- economic
Activity

Table of Contents
INTRODUCTION ..........................................................................................................................3
How will the UK current growth rate impact on the chosen business (give reference to
economic life cycle, GDP, inflation, unemployment rate) .........................................................5
What are the current global challenges facing by the chosen business and recommendations on
how to overcome them in this current time? ..............................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business development concept encompasses assemblage of internal and external
variables which have a tendency to impact organizational capacity. Corresponding these factors
to what the client needs or aspires for,supply and demand,workforce formation proprietary
interest administration presided by state, change of financial nature and raw materials contracted
for and other related factors assists business related investigation and contributes to the
development and exhibition of the firm.
whereas actions of macroeconomic nature makes introduction of variables which
encompasses actions of monetary nature, rates of joblessness and so forth. Helping in
identification and and gathers the data which is appropriate in the economy,which is handled by
the body of governance in the nation. If the organisation that has been considered for
investigation is virgin gathering ltd. Which has a reputable standing in Britain. In the 1970's
Richard Bronson and nik powell established this company which has multitude of business
undertakings such as virgin media, virgin occasion, virgin aircraft among others. Multiple
variables such as Gross domestic product, rates of unemployment, Expansionary undertakings
and development rated of united kingdom and circumstances of flow and other factors which
have an influence upon business operation of virgin Atlantic airline will be examined in this
report.
MAIN BODY
Macro-economic considerations such as economic output and rates of unemployment
inflationary Impact the above stated business which needs to factor in for influence on business
output :
Financial element of full scale nature forms part of field of monetary considerations which
connotes movement of financial assets that is rates in finance Gross domestic product, cost
associated with running of business and expansion etc. monetary elements which are large scale
in nature can be divided into three parts which encompass negative positive and non partisan.
Monetary elements of large scale helps with estimation what lies ahead in terms of expansionary
needs, rates of unemployment and variable of wide nature.Associations and state choose take
figure rate route.

Virgin Atlantic Business is affected by enormous factors of outside nature intending for
gathering of goals designated and exhibition of investigatory practice of organisation. In 1984
British global carrier virgin Atlantic aviation laid out routes between Falkland islands and
London. Which can be stated to be virgin gathering piece. Techniques and aircraft operating in
the Atlantic are impacted by macro climate. Below are some of the considerations that need to be
accounted for while assessing outputs of virgin Atlantic :
 Inflation: when business are getting loans at a cheaper rate they tend to expand which
creates additional cost due to which there may be a price rise. it relates to the
expansionary rate and labor and product expense in the economy at a given time-frame.
Measurement of general incremental cost is essentially expansion. It is the rate at which
a given time frame there is inflation in the price of merchandise . It relates to what is
occurring when labor interest and expansionary practice of the product is on the table.
Airline's inflation rates are pushed by a remainder of significant cost for operations. Significant
difficulties are there which are factored in products supply and for administrative duties, due to
which expansion of work cost takes place which affects execution of organizations economy in
the present year. Administration practice of CEO is not being bought into by the potential
customers of virgin airline.(Mariappan 2022)
The sleuth of measures of in procuring the fuel is essentially cost more than the fuel itself.
Financial plan of the organisation is affected by such attributes. organizational benefit of fuel
which assists in flying capabilities and data sharing with different business organizations.
 Rates of unemployment: indication to rate of unemployment which searches for
people who are not working anywhere and percentage of those not working gives gives an
indication of how the monetary policy will take form in the future. That whether the rates
of interest will rise or not as when they are raised business can't take loans and hence new
jobs are not getting created. However if the economy is doing good the rate of
unemployment can be recovered. Rate of unemployment has been greatly affected by the
pandemic as there is clear rise of people who have lost their livelihood in turn because of
high rate of unemployment the interest rates are kept down so that business can take loans

at a cheaper rate and can expand thereby accommodating more people on the job thereby
deceasing in unemployment rates.(Rodriguez 2022)
 Virgin Atlantic has operating expense of general nature of 531$ million. Methodology of
market progression of keeping interests rates down helps economy in the testing times
these . Increments for recruitment of new staff may be of use in eradicating joblessness.
How will the UK current growth rate impact on the chosen business (give
reference to economic life cycle, GDP, inflation, unemployment rate)
According to recent finding , it is stipulated that the UK economic rates reached
7.5% in 2021 and the gross domestic price increase by 1% in the three months. Britain assumes
higher quality expectations for day to day needs according to individuality is developing sector
(Iivari and et. al., 2022). pandemic has affected various industries adversely nearly 10 percent fall
in finishing during 2020
citizens of united kingdom are enormously affected by covid 19 in addition to the economy of the
UK. Virgin Atlantic airline access sources which substantial affect development rate of financial
assets.
Cycle of economy: state of economy in general is affected by four phases which encompasses
contraction, trough expansion and peak:present phase of financial cycle which encapsulates
business, client, Gross domestic production can be examined through these factors. Development
rates presently affecting virgin Atlantic airline can be gathered by the phases of monetary cycle.
Below are stages which which help in gathering the ongoing economic situation (Swarts and
Wallace 2019)
 Expansion: economic stages which entails low borrowing cost which means businesses
can expand and produce more which causes inflation. The Rise in the cost of fuel due to
high demand pushes up the airfare of virgin Atlantic airlines.
 Peak: the highest point at which the economy reaches with maximum rates it is the stage
where imbalances in the economy can be corrected. Airlines can create this sort of
scenario to balance out their cash inflows to expand in the future.

 Contraction: It is the stage at which the economy can't grow anymore due to high rate of
borrowing which limits any scope of expanding the businesses Virgin Atlantic Airlines
can hold off it expansion till rates are down .
 Trough: economic cycle is at its lowest point no growth is being registered by the
economy Virgin Atlantic Airlines can analyze the environment of business to recover it's
losses.
Gross Domestic Product: value of goods and services being produced in any given year is
known as gross domestic product. Short term indicators are released every month. (Tacchella
Mazzilli,and Pietronero,2018)
How can the government current intervention methods affect the selected
business? (e.g., fiscal and monetary policies, furlough scheme etc.)
some people having the capability to change the work environment and policies which
includes fiscal and monetary they plays a important role in marketing business. Which is very
important for complete the overall procedural purpose in the market. In content to Virgin
Atlantic Airlines, for boosting the currency and he interest rate as well as increasing the profit
rate , there are various type of plan of action government made which affect the business in many
ways. The methods are as following-
 Fiscal policy: It is defined as the policy used by the fiscal and spending policies of the
government to create economic conditions, including demand for jobs, inflation, growth,
and goods and services. The current fiscal equilibrium position, the rule being a
combination of two or three, stipulates that overall GDP exceeds 3%, where the
government respects the 5% GDP rule. Virgin Atlantic airlines suffered major losses in
the market compared to other tax policies that the government responded to the loss of
GDP in the major market. The policy targets public debt and also helps in analyzing the
current government budget. The government calls it the primary fiscal rule, where the
debt rule is shared across the country three times a year. Current government budget is
expected to be in surplus over the forecast period(Popescu, 2022).

 Monetary policy: This is called a set of measures that help manage the amount of money
available in the economy and the channels in which new money is supplied. In other
words, it refers to the tools that central banks control to maintain interest rates such as
interest rates, supply, demand and money. It is a supply of money that diminishes as
interest rates change. It is set by the central bank and changes interest rates and money
supply. In essence, Virgin Atlantic is focused on effective operations and can assist the
company through a wide range of monetary policy variations. Virgin Atlantic measures
that improving the workforce can predict people's interest rates. It can analyze that cash
flow is heading in the right direction.
 Furlough scheme: This is a temporary leave that an employee takes for a particular need
or situation. Or it could be due to the financial situation of the employee. It can be short-
term or long-term. (Perelli Chao, S.Y. and Berrington 2020).This program was set up for
support staff and workers in the Covid 19 situation where staff can take temporary leave
depending on the situation. In connection with Virgin Atlantic, they offered this program
to senior staff and workers who could take this vacation temporarily. It helps the company
by becoming an industry leader. It also helps Virgin Atlantic to get Bette Work by
employees that represents the profits of the company. This is an approach that allows
employees to take leave and improve their work depending on the profitability of the
company. (Ruiz-Palomino 2022)
What are the current global challenges facing by the chosen business
and recommendations on how to overcome them in this current
time?
Current global changes are changes in the environment that cause global problems.
These issues include climate change, pollution, unemployment and lack of education. These
issues can impact your business and even better ways of working. During the Covid era, Virgin
Atlantic faced more challenges,(Singh 2022) and it is analyzed that companies need to overcome
them. Companies helping Virgin Atlantic address this have some recommendations, including:

 Unemployment: This refers to one or more employees who are currently not working
anywhere or are unemployed. The impact of Covid 19 on people who have lost their jobs due to
high unemployment. Loss of unemployment has been analyzed to reduce the company's overall
profits. And while lack of opportunity, today companies are changing so many important rules
that can help employees work better and ensure the success of their organizations. (Rodriguez and
et. al., 2022).
 Fuel: The overall price of fuel is rising day by day, which represents the company's
additional costs. It may affect Virgin Atlantic's financial operations. It is the main
problem of the company by raising the cost of fuel. It also affects the overall profits of the
airline. With so many airlines in the world, increased fuel costs are a fundamental factor.
In the context of Virgin Atlantic, it can reduce profitability and generate revenue for the
company. This is a major problem facing all airlines or other industries.(Semerádová, T.
and Weinlich 2022)
 Passenger experience: Passenger experience and comfort play an important role for any
airline as the entire industry works. Virgin Atlantic offers excellent passenger service,
contributes to passenger satisfaction and helps to attract more passengers. The services
provided by the company take passenger safety into consideration. Companies need to
assist passengers by identifying their needs and providing appropriate services. Support
the company in revenue growth and future growth (Ruiz-Palomino and et. al., 2022).

CONCLUSION
It can be concluded that the Marco Financial aspect is called part of a study dealing with
economic benefits, unemployment, borrowing costs, etc., as it has different types of impacts that
affect general management. increase. In the above report, we used Virgin Atlantic to investigate
the overall profitability of the organization. This can be measured by GDP, economic
performance. Current mediation methods used by public institutions have influenced economic
strategies, including financial agreements and supervisory approaches. There are also many types
of global changes that affect a company through natural problems such as environmental changes,
climate and pollution. These advances can impact the business by increasing fuel costs, which is
the misuse of cash for business activities. This review suggested strong controls provided by
organizations that help companies work better and add human resources and products. The
overall economic impact helps to assess the opportunities of the organization and address its
capabilities for exhibitions and future development.

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