Week 4 Industry Growth and GDP Growth Case Study 2022

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WEEK 4 CASE STUDY:
INDUSTRY GROWTH AND GDP GROWTH

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Contents
Introduction................................................................................................................................3
Analysis......................................................................................................................................3
The relation between GDP growth rate and airline industry growth rate..................................4
Effect of growth of the airline industry on the GDP growth rate...............................................4
Different stages of business cycle..............................................................................................5
Conclusion..................................................................................................................................5
References..................................................................................................................................7

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Introduction
The USA is the largest economy in terms of GDP with 21.34 trillion dollar USD. One of the
biggest contributors to the national GDP of the USA is the airline industry. The total size of
the airline industry of the USA is 1.5 trillion USD, which is the largest in the world.
Currently, the airline industry of the USA employs more than 10 million employees which
are 4% of the total labour force of the country. The industry serves 2.4 million customers
each day as the airline is the most convenient mode of transport in case of the USA
(Hannigan, Hamilton III & Mudambi, 2015). Due to the huge amount of output of this
industry, it contributes around 4.7% of the overall GDP of the USA.
Despite the impressive statistics, the airline industry of the USA faces many challenges that
hit the potential to expand in the future. One of the biggest challenges faced by the industry is
the congestion due to the presence of a huge number of players in the market. Apart from
that, the dependence of the industry on technology increases the operation cost of the
industry. Nevertheless, there are opportunities as well that include an increase in the demand
for aviation due to the increase in disposable income of the customers of the market.
Data
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
0
500
1000
1500
2000
Output of the airline industry of the USA
(Billion USD)
Ouput of the airline industry of the USA (Billion USD)
Linear (Ouput of the airline industry of the USA (Billion USD))
Figure 1: The output level of the airline industry of the USA over the year
(Source: Vo, Xiao & Ho, 2019)