Macroeconomic Elements and Their Impact on Virgin Atlantic Airlines

This report analyzes the impact of macroeconomic elements on Virgin Atlantic Airlines, including inflation and unemployment rates. It also discusses the effect of global challenges on the airline industry and how government intervention methods such as fiscal and monetary policies and furlough schemes can affect the business.

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Table of Contents
INTRODUCTION.......................................................................................................................3
An description of two macro-economic elements that the chosen business will consider and the
influences these could have on its business outputs (macro-economic factors e.g., economic output,
unemployment rates, inflation etc.)...................................................................................................3
Effect of current global challenges on Virgin Atlantic Airlines............................................................4
How can the government current intervention methods affect the selected business? (e.g., fiscal
and monetary policies, furlough scheme etc.)....................................................................................6
CONCLUSION...........................................................................................................................7
REFERENCES............................................................................................................................8
APPENDIX................................................................................................................................9

INTRODUCTION
The report prepared as under takes in account the description of Business environment and
how the interna and external factors would be affecting its working and functioning capacity in
the long run. It also explains what could be the medium for earning money, in what ways clients
can sort their queries and search for better prospects (Brenkert, 2019). Such factors respond to
the needs and wants of the clients and would help in building connections, and formation of
business-related activities. These factors would be corresponding to needs, demands and supply
formation of the workplaces, interests, state run administrations, change in financials and the
contractors of the raw material and hence which would help in investigating the business
enterprises and working upon the development and exhibition of the respective companies. The
macroeconomic decisions would be introducing variables that would be incorporating monetary
based actions, joblessness are which would help in identifying and gathering relevant and
appropriate data related to economy, handled by the governing bodies of a territory. The
organisation has been taken into consideration for the examination as Virgin ltd. Which is a
reputed British company, established by Richard Branson and Nik Powell in 1970. This
development was able to produce virgin aircraft, media and occasion and so forth. This report
would be helpful in assessing the wider ranging factors affecting the functioning of the Virgin
Atlantic Airline which has incorporated gross domestic product, unemployment rates, UK
development rates and expansion.
TASK
An description of two macro-economic elements that the chosen business will consider and the
influences these could have on its business outputs (macro-economic factors e.g.,
economic output, unemployment rates, inflation etc.)
Comprehensive currency components are terms in currency-related fields, and are tests of
currency development, such as currency interest rates, expansion, GDP, costs, and more.
impartial. This massive currency-related calculation helps assess future growth rates,
unemployment rates, and various factors (Chen, Cheung and Tan, 2018). This digital rate
decision is made by states and affiliated agencies. Virgin Atlantic's business presentations are
affected by a number of external factors, and the company plans to review presentations based on
specific objectives and associations. Virgin Atlantic is a British global airline, launched in 1984,

flying between London and the Falkland Islands. It is part of the Virgin Society. The macro
environment affects Atlantic aircraft and strategies. Several variables could affect Virgin
Atlantic's overall earnings, as follows:
 Inflation: It shows the rate at which normal work and project costs increase in the
economy over a given time period. Scaling is basically constantly estimating the overall
cost of adding. Therefore, it is the rate at which the cost of the product inflates over a
defined time period. When the interest of the work and the development of the project are
closely followed, what is happening begins. Virgin Atlantic's inflation rate is driving
concerns about huge fees. There are endless troubles in supplying projects and
organizations as the growing cost of work affects the growth of the association's
economic execution. Because this navigator of Virgin Atlantic does not accept an
organization that is a risk to the CEO. The fuel ratio scalp is basically more expensive
than other fuels, which affects the overall monetary arrangement of the association (Chi,
Li, Trigeorgis and Tsekrekos, 2019). They add the strengths of the association to the fuel
that helps the flight and share this information with various accomplices in the business.
 Unemployment Rates: It shows the unemployment rate, which is the rate at which the
workforce is currently not working anywhere. The degree of work is not going to work.
This status quo rises when conditions related to money change when economic interest
rates fall and market fear of jobs rises. If the economy is strong enough to make up for
unemployment, the current situation is productive. The Covid-19 pandemic crisis has
impacted the overall unemployment rate in the UK, as it is currently the case with
individuals from countless social classes losing their jobs and economic growth rates
declining due to unemployment. Virgin Atlantic sees driving the market as its most
important flight perseverance, coordinating 45% of its workforce to excel in the market
framework. The general cost is over $531 million. The movement of these market
technologies helps the economy take its place in the coming era (Easterby-Smith,
Jaspersen, Thorpe and Valizade, 2021). They also increased their headcount by recruiting
new workforces, which helped reduce unemployment.
Effect of current global challenges on Virgin Atlantic Airlines
Since 2019, most of companies or firm facing the global issues in running their business
enterprises smoothly. It is a type of challenge which effect the economy of the country largely

and it is basically contain three types of issues are social, economic and environmental. During
the Covid-19 pandemic, majorly the environment challenge are taken place which effect the
whole population health and standard of living. This issue include change in weather condition,
loss of fixed assets, degradation of environment and problem of pollution (Hamilton and
Webster, 2018). In UK, this situation are also arise that impacted its business firms, Virgin
Atlantic Airline are one of the united kingdom company which faces the issue during the
pandemic time. These issues along with its recommendation and how to overcome from this
situation are also described below:
Unemployment: The unemployment is the single word which describe the people condition that
he or she are employed or not. There are mainly two reasons of unemployment, first is people are
looking for the job but the companies or industry are not interested to appoint them and second is
when people himself are not interested to work with any of the organization. But during the
pandemic period, every people are facing the same unemployment because the companies
discarded its employees or workers on huge numbers. The main reason behind this, the business
are capable that time to generate profit and to pay the employees. The company Virgin Atlantic
Airline also do the same with their employees because their profits and saving are declined
rapidly and the works are all shut it down. But after reducing the effect of pandemic company
feels shortage of employees which effects its work. To overcome from this, it is suggestion for
the industry to appoint more person and gives the existing employees a bonus or increment.
Fuel: It is the matter which play a huge role in current world economy because generally every
people have its own transport and every transport need petrol or diesel. The industry of Virgin
Atlantic Airlines also consists large volume of fuel to starting up its airlines. During Pandemic
the price of fuel are increased highly which effects the company savings and profits. In other
words, the cost increasing, the profit or savings are decreases constantly. To defeat these
challenges, it is important for the increase the price of the tickets, services and foods because it is
the only way to cover the cost of the company (Henderson, 2021).
Experience of passengers: The main reason behind in every business profitability position is the
customer. They play a major role to increase or decrease the price of the net gain or company
product or services. The context of the UK Virgin Atlantic Airlines industry, they provide
behave with its passengers and gives them a proper service at the time of travel. Due to this
customer are attracts are attracts because their needs are satisfied. But because of pandemic the

volume of passengers are decreases as compare to normal days. For increasing the volume of
customer, the airlines have to bring out the small things such as safety according to the
government guidelines and providing mask.
How can the government current intervention methods affect the selected business? (e.g., fiscal
and monetary policies, furlough scheme etc.)
There are big player in the market and they have enough power to influence the market
environment, policies and procedures. These policies includes fiscal and monetary policies that
also include the whole activities of the marketplace. It help to enhance the value of currency and
also improve profitability and interest rates. There are several kinds of policies of government
discussed below which impact the business operations of the company Virgin Atlantic Airlines:
 Fiscal policy: Fiscal policy refers to the uses of government payments and taxes to
impact the economy, mainly macro-economic conditions considering multiple demand of
product and services, employment and growth of economy. At the time of recession,
government can state expansionary fiscal policy by decreasing tax rates to grow multiple
demand and expand growth of economy. The overall GDP of the UK is exceed by 3%,
where the government meets the rule by 5% of GDP. Virgin Atlantic Airlines suffering
huge losses in their operation. The main focus of these policies on government debts and
also provide understanding about the government budgets. The government called it
primary fiscal rule, where the debt rule share in the nation at three times in a year. The
current budget of government should be surplus for forecast period (Hirschmeier and
Yui, 2018).
 Monetary policy: It refers to the group of actions that help to control monetary
instruments. These monetary instruments includes repo rates, reverse repo rates, liquidity
adjustment facility, marginal standing facility and corridor etc. The main motive of this
policy is to manage price stability while keeping in mind the element of growth
assumptions to sustainable growth. Monetary policy help to control various rates and
variables that include interest rate, demand, supply and so on. These rates are controlled
by the central banks when any need arise(Lopez and Seligson, 2019). Virgin Atlantic
Airlines suffer by the rapid fluctuations in the monetary policies. These policies may
increase the production cost of the business activities. During Covid -19, prices of air

fuel is continuously increasing which increase the cost of the fare tickets. There policies
affect business as well as peoples. They may decrease the purchasing power of the
company.
 Furlough scheme: Furlough refers to the provisional leave taken by an employee for a
particular reason or need. Furlough may be for short term purpose or long term. This
scheme provide higher level of support to the workers and employees during Covid-19. It
provide job security for the people. People can take leave during this pandemic. Virgin
Atlantic Airline opt this scheme in order to help employee in this pandemic. It give leaves
to them or provide work from facility so there is no need to come office. This resulting as
increase the trust of company in the eyes of employee and they work more efficiently to
achieve organisation goal. This is the approach where employee is able to take leave and
improve their working as per profitability for company (Khmara and Kronenberg, 2018).
CONCLUSION
The report prepared as under refers to Macroeconomic based elements and facts which
would be counted as a part of the study that is concerned with the economic areas, loan expenses,
jobless rates, economic conditions and so on are various sorts of effects which would affect the
general business economic environment. In the above report being prepared it has further been
helpful as well as useful in ascertaining what has been the development of company in related
years, what effective measures can be taken, what monitory approaches would be best suitable
for it. Its growing GDP rate and inflation rate as well, climatic conditions and various
environment related changes as well.

REFERENCES
Books and Journals
Brenkert, G.G., 2019. Mind the gap! The challenges and limits of (Global) business
ethics. Journal of Business Ethics, 155(4), pp.917-930.
Chen, Y., Cheung, C.M. and Tan, C.W., 2018. Omnichannel business research: Opportunities
and challenges. Decision Support Systems, 109, pp.1-4.
Chi, T., Li, J., Trigeorgis, L.G. and Tsekrekos, A.E., 2019. Real options theory in international
business. Journal of International Business Studies, 50(4), pp.525-553.
Easterby-Smith, M., Jaspersen, L.J., Thorpe, R. and Valizade, D., 2021. Management and
business research. Sage.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Henderson, R., 2021. Reimagining Capitalism in a World on Fire: Shortlisted for the FT &
McKinsey Business Book of the Year Award 2020. Penguin UK.
Hirschmeier, J. and Yui, T., 2018. The development of Japanese business 1600-1980. Routledge.
Khmara, Y. and Kronenberg, J., 2018. Degrowth in business: An oxymoron or a viable business
model for sustainability?. Journal of Cleaner Production, 177, pp.721-731.
Lopez, J.R. and Seligson, M.A., 2019. Small business development in El Salvador: the impact of
remittances. In Migration, Remittances, and Small Business Development (pp. 175-
206). Routledge.
Parker, M., 2018. Shut down the business school: What's wrong with management education.

APPENDIX