Factors Affecting Virgin Atlantic Airlines: Macro-Economic Analysis

This report analyses the impact of macro-economic factors such as inflation, unemployment rates, GDP growth rate, and government intervention techniques on Virgin Atlantic Airlines. It also provides recommendations to overcome current global challenges faced by the company. The report suggests that Virgin Atlantic Airlines needs to consider inflation and unemployment rates while expanding its business. The UK's current growth rate has a positive impact on the company. The report also highlights the government's fiscal and monetary policies and the furlough scheme. Finally, the report recommends that the company should focus on overcoming environmental issues and unemployment to improve its overall performance.

BMP4003 Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
1. Explain two factors of macro-economic that the Virgin Atlantic Airlines will need to
consider...................................................................................................................................3
2. Effect of UK current growth rate on Virgin Atlantic Airlines...........................................5
3. Present intervention techniques of government on Virgin Atlantic Airlines.....................7
4. Current Global challenges facing Virgin Atlantic Airlines along with recommendations and
how to defeat them in this present time..................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The main motive of business-environment includes the different types of variable that
regard internal and external factors that affect the business capability. These factors run into to
director to meet customers’ needs and wants or demands and supply, provision of manpower,
stakeholders interest, management to run operations, Financial ups or downs and supplier of raw
material wants for activities etc. that help in measuring the requirements of business to achieve
the organisational objective in more efficient manner. Whole economic environment is analysed
with the help of macroeconomics that includes consumer behaviour, attitude, trend and the
affecting factors. It also helpful to measure the enhance the performance of a company. This
report includes various actions of macro-economics are available for the variables that are
financial activities, unemployment rates etc that help a firm to collect important information
related to the specific purpose (Clark and et.al., 2022). This data is accurate because it is taken
from government reports. Virgin gathering ltd is selected to analyse its performance and other
internal business activities. It is a well-known British organisation and it is founded by Richard
Branson and Nik Powell in 1970. These organisations run their operations in many products and
services such as virgin aircraft, virgin occasion, virgin media etc. There are some factors
discussed below which affect operations of Virgin Atlantic Airline and they are incorporates,
expansion, GDP, joblessness rates, UK development rates and flows condition etc.
TASK
1. Explain two factors of macro-economic that the Virgin Atlantic Airlines will need to consider
Full-scale monetary issue is a term of the monetary discipline which is the examination of
monetary development, for instance, financial rates, extension, Gross domestic product, cost, etc.
Enormous scope financial elements can be described into the three sorts who contain positive,
negative, and impartial. This huge scope financial computation helps with assessing what's in
save at speeds of extension, joblessness rates, and exceptional factors. This figure charges want
has been taken through the country and affiliations (Dery., 2022). The introduction of Virgin
Atlantic's business endeavour is influenced via a tremendous wide assortment of outside factors,
which means to gather the predetermined longings and organization examination of the show.
Virgin Atlantic flight courses are in british worldwide help that is spread out in 1984 to fly
among London and the Falkland Islands. It is the piece of the Virgin get-together. The effect of

Macroclimate influences the Atlantic plane and methods. There are some following factors that
can influence the universal Virgin Atlantic Airlines outputs which are as follows:
 Inflation: It suggests the cost which is grows the standard pace of work and items in the
monetary framework at given time frame. Development is assuming believe it or not
estimating the typical addition cost and cost. As such It is the rhythm of blows up
expense of product at explicit time period. It is the thing is happening which is begun
when the diversion of work and items extensions watching out. Virgin Atlantic Carrier's
Expansion charges are driving an outcome of having the monstrous cost keeping watch.
There are such vast hardships which are respected in supply the product and organization,
in view of grow the work cost which influence the association's economy execution at the
contemporary year (Galdón and Ortega., 2022). Because of this traveller of Virgin
Aircraft are currently not accepting the organizations which is the danger for the Chief.
The scalp of proportion of fuel are truth be told exorbitant extra than various gas which
significantly affect the customary monetary diagram of association. They brought the
association's benefit into gas which is help to fly and besides share this records to
extraordinary colleagues in the business venture.
 Unemployment Rates: It shows to the paces of joblessness which is examination the
paces of staff who are now not at existing working anyplace. The level of work is no
longer working. This current circumstance rises when the economic situations changes
where the economic system fees are down and the feeling of dread towards work ascends
in a market. This existing circumstance has been fruitful on the off hazard that the
economy improvement is solid; the joblessness fee can be covered (Gholipour., 2019).
The Covid-19 pandemic emergency has influenced the familiar UK joblessness due to
this existing circumstance such infinite human beings agencies of humans have lost their
positions and due to the fact of unemployment the economy costs down. Virgin Atlantic
Airline has driving in the market as its most memorable flight persistence where they
organize 45% people for impending difference in market systems. The common expense
more than $531 million. In the impending times these progressions of market
methodology help the economy with taking spots. They are moreover increment their

staff with the aid of recruiting the new employee which is helps in to diminish the
joblessness.
2. Effect of UK current growth rate on Virgin Atlantic Airlines
As per investigation, it is analyzed that the UK monetary framework expenses created
7.5% in 2021 and the Gross domestic product increase by means of 1% in the three months. UK
has a choicest assumption for everyday solaces in understanding to people, it is making industry
(Inoue., 2018). The impact of Coronavirus crisis affecting several organizations which is
obliteration 9.4 percent fall persistently completing in 2020 which is similarly measure that
singular's prosperity are affecting keeping watch. UK individuals has enormous impact through
this pandemic and moreover on UK economy. There are a couple of specific sources which is get
admission to by Virgin Atlantic Carrier that reasonably influences monetary improvement
charge.
1. Economic life cycle: The ordinary financial arrangement of state which is assessment by
utilizing the 4 periods of cycle which consolidates improvement, zenith, choking and
box. These components help to assessment the ongoing period of the financial cycle
which consolidates, for instance, business, client, development, Gross domestic product,
etc. UK state of the art improvement charge that effect on Virgin Atlantic Aircraft can be
assessed with the guide of these four periods of financial life cycle which can help in
better appreciation for the of people (Kabiru., 2021). Following are the reaches helps with
distinguishing the continuous improvement
 Expansion: The stage the monetary framework experience which is tending low leisure
activity rates, increment the assembling and develop the inflationary. The expansion of
Virgin Atlantic Aircrafts confronted with the guide of due to extend the interest of the
business and furthermore the cost of fuel is expanding.
 Peak: it is the stage where the economy development hits with most rates. This stage
basically makes for right the lopsided characteristics in the economy. Virgin Atlantic
Aircraft can make this pinnacle blast for right their lopsided characteristics activities
which is help association in filling in future.
 Contraction: Here every one of the falls that are working gradually is estimated to
directly through the period. The rectification of business falls uses changes, increment

slow and so forth (Karlsson, Matvieiev and Obrizan., 2022). Virgin Atlantic Aircrafts can
happen that the common mistakes can be estimated with the guide of this stage and right
it for future.
 Trough: In this stage the pattern of monetary framework presence hits low when the
monetary framework blast is low and gets better it all along. Virgin Atlantic Aircrafts can
assessment the endeavour climate by recuperating from the business.
2. Gross Domestic Product: It is otherwise called Gross domestic product, which measure
the creation expense of labour and products in the US of America over the specific time
span. The gauge Gross domestic product of UK delivered on month to month
establishment which otherwise called as non-long-lasting pointers. The Gross domestic
product developed by 1% in 2022 which is with the guide of augmentation of travel
services.
3. Inflation: Expansion alludes to the rates which are will expand the normal cost of labour
and products in the monetary framework at given time span. Expansion is fundamentally
estimating the normal grow rate and cost. All in all, it is the charge of builds expense of
things at specific time span (Monserand, 2022). It is the situation which is started when
the interest of things and contributions expansions on the lookout. Virgin Atlantic
Aircraft's Expansion costs are driving because of the reality of having the enormous rate
on the lookout.
4. Unemployment rate: This charge of joblessness alludes to the charges which are
examination of the statements of the workforce who are as of now not presently working
any place. The extent of work is done working. This present circumstance emerges when
the money related conditions changes the spot the monetary expenses are down and the
worry of occupation ascends in a market. The UK joblessness rates becoming because of
the reality of the Coronavirus emergency the spot they measure the higher working of the
business.
3. Present intervention techniques of government on Virgin Atlantic Airlines
Government play a most important role in every sector of the entire economy by
regulating its policies. Different field consume different activities by remembering this

government set rules and guidelines accordingly. So, it can be says that government have a
power to control the country economy and change the work surroundings. It generally includes
two policies that are fiscal and monetary policy. It is also liable to increase the country currency
and interest rates (Nazemi, Heidenreich and Fabozzi., 2018). The company Virgin Atlantic
Airlines of UK are also impacted from this government invention which is as follows:
1. Fiscal: It is the policy which is utilised for both government spending and taxation to
affect the whole economy. It contains demand of employment, inflation, development
and product and services. Generally government uses this policy to promote liable and
balanced growth and declining the poverty. Fiscal policy is divided into three parts:
neutral, expansionary and contractionary policy.
 Neutral policy: These types of fiscal policy are also known as balanced budget. Neutral
policy is helpful for the government in bringing sufficient amount of taxation to cover its
expenditures or spending.
 Expansionary policy: It is the type of fiscal policy where government spends more money
than it takes from taxes. It defines the situation of decreasing value of taxes, increasing
cost and sometimes, the mixture of both the condition.
 Contractionary Policy: It is the fiscal policy which determines that taxes are consumed
more by the government as compare to its spending.
The company also faces the types of fiscal policy when the UK government GDP are decreased
in the economic market. The fiscal policy helps at the time of targeting the debts of government
and observing the current budget of government.
2. Monetary policy: It is alluded to as the arrangement of exercises which is help to control
the volume of cash which is available in the monetary situation and furthermore control
the channels that are given by utilizing new cash. In various words, it is alluding to the
gadgets which control by utilizing the national banks to save the statements, for example,
hobby rates, supply, request, cash, and so on. It is a money outfit that is diminishing
while the evolving rates. It is set by the national banks and adjustments the interest
expenses and cash supply. Virgin Atlantic Aircrafts are designated on pleasant working
which can help the business through the huge assortment of financial approach. Virgin
Atlantic Aircrafts measure that the enchantment in working can estimate the premium

expenses of people which can be dissected that the skim of money is in the legitimate
course
3. Furlough Scheme: It infers to the depart that is transient and taken via the worker for
some wants or situation or it may also be due to monetary stipulations of the employee. It
can be for the quick or lengthy term. This software has been set up to aid employees and
workers in a covid-19 situation, where the employee can take brief go away as the
scenario arise. In context to Virgin Atlantic Airlines, they supplied this scheme for top-
level personnel and workers where they can take this depart on per temporary basis. It is
assisting the organisation by using leading in the industry. It also helps Virgin Atlantic
Airlines to get higher work from their employee, which is an benefit for the company.
This is the approach where the employee is able to take leave and enhance their work as
per profitability for the company
4. Current Global challenges facing Virgin Atlantic Airlines along with recommendations and
how to defeat them in this present time
Global challenges or issues are three types in business organization that are social issues,
economic issues and environmental issues but in present time only environmental issues make a
big impact in every nation and economy which include change in climate, depletion of resource,
environment degradation and pollution (Song, Geng and Fahad., 2022). During the time of
pandemic, it arises largely in every economic sector and affects the business industry badly.
Virgin Atlantic Airlines also face these type of problems but now it need to defeat them. There is
some recommendation and strategies on behalf of the airlines companies are explained below:
 Unemployment: The word unemployment is used for that person who are not employed
or hired in any organization or industry. To overcome from this situation means to
improve the country economy. At the time of Covid-19, large volume of population are
effected from unemployment, some people are discarded from existing jobs and some
drop up their jobs because of this environmental issue. The business firm also effected
from this situation because it affect the overall income. Now, company uses so many
techniques to overcome from this situation by appointing substitute in every department
of the airlines for running its business smoothly without any shortage of employee or
workers.

 Fuel: It is the substance which is important in every organization, industries or
households. Now a day, fuel prices are increases rapidly which affected the income of
every sector of economy. The Virgin airlines also suffer from this problem because their
work is totally depend on the fuel without fuel flights are not take off. It can be says that
fuel are the major substitute of airline and transport industries. This cost effect the
company savings and overall income to get better of this situation, it is a suggestion to
increase the price of travel.
 Passengers or customers experience: The customer is the major source of money and
profit in every sector. If the company satisfies its customers then it reply customer
consider only a particular company goods or services (Yıldız, 2018). In context of Virgin
Atlantic Airline, the industry are also provide the best services to their passengers at the
time of travel which helpful for them at the time of generating income because passenger
only attract from those sides which gives them a high level of satisfaction. But after this
global challenges customer are not consider travelling from public transports. To
overcome from this situation, it is a suggestion for the company to provide safety and
security during travel by following government guidelines.
CONCLUSION
From the above report it can be concluded that macro-economics is an important aspect
of understanding market environment, it cover economic yields, unemployment rate, loan costs

etc. This report also includes the factors that impact business operations and activities in worst
manner. This report considers the impact of Covid-19 on the business operations of the company
Virgin Atlantic Airline. The overall business environment of Virgin Atlantic Airline is analysed
with the support of Gross domestic product and its economic production. Covid-19 affects
business planning and strategies that are prepared before this pandemic. There are some natural
factors that also affect business-environment such as disasters or climate changes etc. Due to
increase in the prices of air fuel the company needs additional funds to run business activities
and this may increase the cost of production, also decrease profits. Company has to take strict
actions in order to sustain in the market and to maximise its revenues. Macro-economic provide
better understanding of various future opportunities and also helpful in preparing future
strategies.

REFERENCES
Books and Journals
Binder, C., 2020. Coronavirus fears and macroeconomic expectations. Review of Economics and
Statistics. 102(4), pp.721-730.
Clark, T. and et.al., 2022. Macroeconomic Forecasting in a Multi-country Context.
Dery, C.B., 2022. Divisia Monetary Aggregates, Macroeconomic Shocks, and Economic
Fluctuations. Arts.
Galdón, C.M. and Ortega, E., 2022. Skewed SVARs: tracking the structural sources of
macroeconomic tail risks. Documentos de trabajo del Banco de España. (8), pp.1-43.
Gholipour, H.F., 2019. The effects of economic policy and political uncertainties on economic
activities. Research in International Business and Finance. 48, pp.210-218.
Inoue, T., 2018. Financial development, remittances, and poverty reduction: Empirical evidence
from a macroeconomic viewpoint. Journal of Economics and Business. 96, pp.59-68.
Kabiru, A., 2021. Macroeconomic Determinants of Stock Market Performance in
Kenya (Doctoral dissertation, University of Nairobi).
Karlsson, M., Matvieiev, M. and Obrizan, M., 2022. The Macroeconomic Impact of the 1918–19
Influenza Pandemic in Sweden. The BE Journal of Macroeconomics.
Monserand, A., 2022. Buying into inequality: a macroeconomic analysis linking accelerated
obsolescence, interpersonal inequality, and potential for degrowth. European Journal of
Economics and Economic Policies: Intervention. 19(1), pp.119-137.
Nazemi, A., Heidenreich, K. and Fabozzi, F.J., 2018. Improving corporate bond recovery rate
prediction using multi-factor support vector regressions. European Journal of
Operational Research. 271(2), pp.664-675.
Song, J., Geng, L. and Fahad, S., 2022. Agricultural factor endowment differences and relative
poverty nexus: an analysis of macroeconomic and social determinants. Environmental
Science and Pollution Research. pp.1-11.
Yıldız, Ş., 2018. The Macroeconomic Effects of Increase in Imported Crude Oil Prices.