This report delves into the profitability of Air Algeria, examining both macro and microeconomic factors influencing its financial performance. It explores key microeconomic concepts such as pricing decisions, aircraft acquisition strategies, output decisions, and opportunity costs. The analysis identifies determinants of airline profitability, including net profit, efficiency, load factor, pricing strategies, daily aircraft utilization, employee productivity, and leverage. It also addresses critical issues affecting airline profitability, such as unprofitable airlines continuing to operate, high fixed and variable costs, aggressive price competition, exogenous events, and reputation for hassles and poor service. The report employs quantitative data, including financial ratios like net profit margin, operating ratio, return on equity (ROE), and return on invested capital (ROIC), to assess Air Algeria's financial structure and performance. Qualitative determinants, such as foreign exchange risk, fuel costs, and labor costs, are also considered. The study concludes by highlighting the challenges faced by the airline industry and offering potential strategies for Air Algeria to enhance its profitability. Desklib provides this and other solved assignments to aid students in their studies.