Macroeconomic Influences on Virgin Atlantic Airlines

This report analyzes the impact of macroeconomic factors on Virgin Atlantic Airlines, including inflation and unemployment. It also discusses the UK's current growth rate and government intervention methods affecting the company. Additionally, the report addresses global challenges faced by the company and provides recommendations to overcome them.

BSc (Hons) Business Management
BMP4003 Business Environment
Assessment 2
Influences of Macro-economic
Activity
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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) 4
How can the government current intervention methods affect the
selected busines? (e.g., fiscal and monetary policies, furlough
scheme etc) 5
What are the current global challenges facing by the chosen
business and recommendations on how to overcome them in this
current time? 7
Conclusion 8
References 9
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Introduction
Macroeconomics can be said as the subject matter that shows output changes , rate of
interest, rising prices, overseas conversation rates and outstanding payments of trade. It helps
in bringing the price stability level and leads to analyses the fluctuations in the given business
task. This also suggest policy measures to control the deflation and inflation which also leads
to determine the balance of payments that causes of deficit on the given balance and suggests
in remedial measures. All the economic indicators are being set by the business and also
analyze the overall consideration in the given market place. In this report, Virgin Airways is
the considered concern organization, this English Airline whose headquartered is in
Crawlwy, England in 1984. this respective airlines conducts its business in across 32
locations in the world. This assignment will determine the two macro-economic aspects
which needs to be analyses and influence the business output. Moreover, it covers leading
development rates within the United Kingdom which has affected the airline business and
likewise analyses current interference by the authorities that are leading to affect the given
business. Lastly, present international situations is being dealt by the company and
suggestions will be made in the given scenario.
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.
These aspects are defined as the factors that causes the financial and political
circumstances which basically affects regional and domestic UK's economy. There are
numerous elements showing the entire performance of the system not a specific group of
individual or organisation. These aspects are impacting the entire influence of the economy
which are illustrated beneath:
Inflation: This is an increase in given level of rates of particular commodity and
services that is being purchased by the household. This can be evaluated with change in the
rates of goods. Basically, rates increase over a period of time, rates may also lead to fall
which is the known as deflation. Inflation can occur when the given prices increases due to
the rise in the production costs which includes the raw material and wages of the employees.
It is the situation which arises when the overall demand of commodities tends to increase the
given prices of the product in the given marketplace. In context to Virgin Atlantic, they
advise that increment in prices is going to play a major role in the given business. With huge
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difficulties which are being dealt for the trading commodities. This is because of increasing
workers price which is influencing functionality and growth of business in the given period of
time. Passengers who are traveling from the Airlines will foot the bill. The CEO of the
company which is scaling the overall amount of airlines and its sustainability fuel. It is
estimated that the fuel is the 5 times more expensive in context to the overall conventional
fuel which is basically impacting the budget and the overall operations of the company in the
target market. This basically leads to analyses that the bill of an business organization to fly
with effective sustainability which the fuel which is going to be divided among each and
every concerned person in given marketplace.
Unemployment: This term refers to the individuals who are employable and rightly
seeking a bob but they are unable to find a job in the particular job role. These are the
individual who are not getting work due to certain problems. In the present situation,
pandemic has a great impact which influences the entire business in UK. Nowadays, people
are loosing their job due to major impact of financial instability in given marketplace which is
leading to reduce the overall growth of the economy. In relation to Virgin Atlantic ,an aircraft
carrier is leading to have actual introductory air travel of the business. They have also reduced
45% of workers that consequence in minimizing the entire expenditure which can surpass
$530 million. In the recent year, it is significant to make the change in the people who is
leading to have the huge modification in the given business. Then they will properly manage
the efficient system for the people. It is also said that strict workers market shows increment
in cost of recruiting fresh employees. In the month of December, more than 4.5 million
individuals are going to loose their job and the company is highlighting these issues on a
greater scale.
It refers to the economic science events which influences entire process and the
functioning of Virgin Atlantic Airlines. This is leafing to increase the given costs as well as
increase in entire manufacturing process and the low possibility of new workers.
How will the UK current growth rate impact on the chosen
business.
This is known that the United Kingdom is having the developing industry and the
people are having good surviving regulations and assures good survival for them. It has
created a huge impact of pandemic due to which downfall has been seen which accounts for
about 9.4% in the year of 2020 due to the public health restrictions on public health within
the economy. There are various approaches which are impacting the business and the
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economic rate of growth which is known by the Virgin Atlantic Airlines that are explained as
follows:
Economic life cycle: This refers to condition which shows that the economy work
under the four main stages and this is the circle design that is enlargement, shortening,
extreme & channel. There are few things which leads to approaching of the improved phase
of such system time interval, total employment, user outlay and interest rates of economic
cycle. There is the better understanding of the individual and its insights which is helpful for
the given business & the investors in the given business. In context to Virgin Atlantic
Airlines, There are four main stages of system time interval which are explained as follows:
 Expansion: This is called first phase in the development and the given interest is less
which push force that leads to increase the inflation and the cost rises. In context to
Virgin Atlantic Airlines, it is going through inflation by which increase in the given
need of the target industry and the rising fuel expenses.
 Peak: There is the development which is hitting its maximization and this respective
series reach its peak leading to the instability in the system which require changes. It
is called as particular factor in which an organization show the peak with higher gains
but it may also lead to instability in the entire working and the operations of the
company.
 Contraction: When the company have meet its peak, this happens due to particular
time phase of shrinkage which leads to invite the growth slowdown and the
unemployment rises and there comes inactivity in the given prices. This is the
respective phase in that the entire prices are being corrected which is being fixed by
the Virgin Atlantic Airlines and leads to reduce the errors.
 Trough: This is the particular stage in which an economy is at lowest point and they
are all setup to recover their entire operations within the system. In consideration to
the Virgin Atlantic Airlines, they are focusing on rectifying the work by taking
corrective measures.
Inflation: The last step of this cycle is inflation which happens with the increasing
expenditure of the companies which are tends to have the raise the given prices of air tickets
by which they can get the inflation within the economy and economy. As every person is
facing changes in the target industry. Due to huge increase in the given rates of fuel, this
basically leads to increase in the rates of tickets.
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Unemployment rate: This is the present industry condition in which they are
influencing the entire economy at larger scale. It is recorded that the unemployment is UK is
keep on rising which is due-to the major impact of Covid-19 and this leads to hurdle the
overall work of the organization at larger pace.
How can the government current intervention methods
affect the selected business?
Individuals who are known as main performer in given marketplace that is
authorities and they also have the capacity to create the variation in the fiscal &
financial policy. This also influence the entire working of the business which leads to
assist in enhancing the currency by which the corporate profits ad the share prices
can leads to reduce the overall value and it leads to increase the rates of interest. In
context to Virgin Atlantic Airlines, these are the various aspects of government which
are influencing the given marketplace functions which are given beneath:
Fiscal policy: In this context, the rates of interest in described as a tool which leads
to analyses of the inflation rate in the target market. It is simply because there is the great
consequences in economy from the inflation. It pertain to having the good work for their
prospect buyer or they are loosing the interest a the federal reserve which is opposed to
increase them. Moreover, there is the rise in the given market place. Huge amount of capital
is being used which are destroyed and also get to the next level in which the government can
impact the market. There are the assets that leads to give the capital which is being destroyed
which and bring the neatly to the next level of government and also having the major
influence in the given marketplace.
Monetary policy: this is the policy which leads to have the most imprecise policy and
the government is controlling various aspects in an appropriate manner by which they can
have the funds within their control in order to gain status in the target market. In
consideration to Virgin Atlantic Airlines, they are focusing on the better working through
which they can ensure huge variations or the given diversification by making change in the
monetary policy. The company is focusing on effective performance for the given interest
rate of individual and also ensure the effective working for the given interest rates so all the
working can be formulated in the given direction.
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Furlough scheme: when the entire world is going through the global pandemic and
the market is having the major halt. It is known that the airline industry is introducing the
scheme top to the employees so that they will get the impermanent time off for the employees
and the specific petition is being made within the organization. In context to Virgin Atlantic
Airlines, they have their focus on the organization which help them to ensure the effective
operations and causes elimination of the over heading costs of an business enterprises in the
hard time of pandemic. This given approach in which the effective working can be ensure so
that they can have the higher profitability and revenues in the target industry.
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 important aspects which assures the effective operations in the company but
there are certain difficulties which are being access by the Virgin Atlantic Airlines which
needs to be solved by the organization so that it can be fulfilled in the proper mode. These are
explained as follows:
Nuances of Foreign Politics, policy & relations: It is generally gets impacted due to
politics, decision-making, rules and policies of the company which are being made by the
manager and it influences the overall conveyance & entire functionality of the business within
the system. In context to Virgin Airlines, they are going through the great losses so that they
can rightly assures the functional and focuses on the better working of the company.
Fuel efficiency: it is known that the cost is the major economic aspects that is
impacting the entire functionality of the airlines industry. This is the financial portfolio which
leads to slow down the business as this is impacted by the airlines organization. Due to
increase in the airline business organization, the conferred rates of fuel keep increasing and it
leads to creation of circle. In context to the Virgin Atlantic Airlines, it is going through
changes which leads to reduction of the overall working of the company.
It is suggested to the company that the Virgin Atlantic Airlines needs to focuses on the
safety measures so that they can restart the given business and influence the overall airlines
industry in the company. When the company is supporting the funds so that they can
effectively ensures the better services to the overall functioning the economy. In this way,
they enhance the various job opportunists and it can effectively ensure the improved living
standards of the people so that better services can be rendered to the people.
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Conclusion
It is concluded that economic science is the study of economics and composition of
the company which ensure the flow of goods in the market. There are consideration which is
impacting the entire functionality of the business as a whole. There are factors which have
impacted the entire functioning of the economy as a whole. This includes the unemployment,
inflation etc. furthermore, economic life cycle is integrated with better understanding of
spending power and the overall consumption within the economy. Fiscal and monetary policy
helps in analyzing the money flow in the given market. They also faces major changes due to
the rising rates of fuel as there are various firms who are competing in the given market.
Finally, this is also suggested for the organization so that they can have the effective system
so that they ensure the flow of goods in the target market.
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References
Sibirskaya, E. and et. al., 2019. Remote education vs traditional education based on
effectiveness at the micro level and its connection to the level of development of
macro-economic systems. International journal of educational management.
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.
Li, Y., Huang, S.S. and Song, L., 2020. Opportunity and necessity entrepreneurship in the
hospitality sector: Examining the institutional environment influences. Tourism
Management Perspectives, 34, p.100665.
i, R. and et. al., 2020. Does economic policy uncertainty in the US influence stock markets in
China and India? Time-frequency evidence. Applied Economics, 52(39), pp.4300-
4316.
Online:
Virgin Atlantic CEO Warns Inflation Will Drive Higher Costs, Fares in 2022 [Online]
Available Through<https://airlineweekly.com/2022/01/virgin-atlantic-ceo-warns-
inflation-will-drive-higher-costs-fares-in-2022/>
Economic Cycle,2022 Available Through<https://www.investopedia.com/terms/e/economic-
cycle.asp#:~:text=An%20economic%20cycle%20is%20the,stage%20of%20the
%20economic%20cycle>
GDP first quarterly estimate, UK: October to December 2021 [Online] Available
Through<https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/
gdpfirstquarterlyestimateuk/octobertodecember2021>
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