Analyzing Macroeconomic Impacts on Virgin Atlantic Airlines

This report examines the influence of macroeconomic factors on Virgin Atlantic Airlines, focusing on elements such as unemployment and inflation rates, and how these impact the airline's business outcomes. It assesses the effect of the UK's economic growth rate, particularly the challenges and impacts resulting from COVID-19, on Virgin Atlantic. Furthermore, the report analyzes government intervention methods, including fiscal and monetary policies, and the furlough system, detailing their effects on the airline's operations. The report identifies current global challenges faced by Virgin Atlantic, such as foreign policy impacts, cost productivity, and unemployment rates, and provides recommendations for overcoming these challenges. This document is available on Desklib, where students can find similar past papers and solved assignments.

INFLUENCES OF
MACROECONOMIC
ACTIVITY

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Describe the macro-economic elements, factors and their impact or influence on its
business outcomes or outputs......................................................................................................1
2. How the UK economic growth rate would impact the selected business enterprise...............2
3. How can the government current intervention methods affect the selected business.............3
4. What are the current global challenges facing by the chosen business and recommendations
on how to overcome them in this current time............................................................................4
CONCLUSION................................................................................................................................5
REFERENCES ...............................................................................................................................7

INTRODUCTION
The report prepared takes in account concept which would be taking in account
performance, decision making process, behaviour and structure of the economy as a whole(Dai,
2021). Economic considers fluctuation in unemployment rates, economic output and inflation
prevailing in the marketplaces. Such indicators of economic performance are being monitored
effectively by the business enterprises, clients and government as well. There is a huge impact
and influence of COVID-19 on the overall functioning and working of the organisation. Virgin
Atlantic Airlines that is the British airlines and its headquarters are being located in Crawlwy,
England in 1984. It is operating its flights over a number of 32 destinations over the globe. This
respective report being prepared would be covering the elements of macroeconomic and its
impact on the overall business. It would also be examining the economic growth rate in UK.
However, it would also be evaluating the present government interventions that would be
affecting the overall functioning of the business areas. At last, it would be accessing certain
issues and problems that are being encountered by the companies and mention the valid
suggestions in relation to overcome from the present situations and point of time.
MAIN BODY
1. Describe the macro-economic elements, factors and their impact or influence on its business
outcomes or outputs.
Macro-economics elements are explained as the key features that is an geopolitical event,
influential fiscal which would be affecting the national and regional economic conditions of UK
majorly. These elements are expected to effect the economy as a whole and not just the particular
and certain individuals(de Camargo Barros and et.al., 2022). Majorly, inflation rates and
unemployment are the two elements of macro-economics which are being defined as under:
Unemployment: It can be explained as a individual which are not having a source of income and
are looking for a job. It takes in account and considers group of certain people which are not
being able to work due to several factors and elements as well. But in present time duration,
there is a major averse effect of COVID-19 which have impacted the employment within the UK
territory. As for now, people had to quit their jobs due to insecure environment and health issues
and some had to lose their job due to less funds available in the economy. In relation with Virgin
Atlantic, there is the carrier that become the lead as possible during the first wave of the virus for
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survivals. It also laid off 45% of its labours, workers through which they can minimize the cost
incurred by a level base of more than $530 million. For this agility would be important and
necessary in the coming year such that they can be complied with the altering strategies and
policies in the marketplaces and would be able to meet the changes in a more easier and simpler
manner in the environment(Dolmas and Koenig, 2019). The labour market denotes that the
wages would increase in the flights for the talented and fresh person. They further added that 45
million group of persons would be quitting their job from workplaces in the month of December
which can finely define the standard of the issue.
These elements of macroeconomics have impacted the overall working and functioning of the
company Atlantic Airlines and the environment. The increase in the rates due to rise in the cost
of production and the minimum or less availability of the talented people or employees.
Inflation: It can be described as the rate of increasing rates over a stated period of time, it is
generally a broad measure which counts the increase in the rates or the increase in the expense of
living in the nation. It is basically resulting from too much chasing of demand and expectations
too less commodities that is affecting the rise in the price level. According to the Virgin Atlantic
CEO, would be warning the inflation would be driving the increased expenses(Geronikolaou,
Spyromitros and Tsintzos, 2020). As of the supply related challenges, increased labour related
costs, pricing of flying in a more sustainable manner will be felt keenly by the business in this
year, the passengers would foot the bill. But the CEO warned that scaling up of the entire
quantity of sustainable aviation based fuel which is at present 3 to 5 times more expensive when
compared with conventional fuel which directly would hit the funds of the CEO. They further
even added and took in account that the airlines not the who would have to foot the bill for flying
on greater sustainable fuel that Is on a whole going to be shared by the shareholders.
2. How the UK economic growth rate would impact the selected business enterprise.
UK is observed to have the rapid growing economic conditions as persons are having
well earning level and better living standards for the good surviving scale. Due to the influence
and impact of COVID-19 it has affected the company as there is increased fall in 9.4% for the
year 2020 because of the pandemic and public health restrictions(Gumata and Ndou, 2019). In
the year 2021, UK's gross domestic product has observed an annual rise of 7.5%. There are
certain method and approaches which have affected as well as impacted UK economic based
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growth rate which can be noticed in the Virgin Atlantic Airlines which is also being stated as
under:
Inflation: In UK, the higher inflation takes place when the increase in the cost of production for
the business would be leading to rising the prices of air tickets which would result to get inflation
within the economic conditions ads the consumer would be facing the huge change or alteration
within the marketplaces(Gumata and Ndou, 2021). Due to the rising prices of fuel tends to
increase the prices of tickets and this will attract inflation within the economy of UK.
Economic life cycle: It can be explained as the overall range of the economic conditions which
passes through four level in a cyclical pattern and there are contraction, expansion, peak and
trough included. There are elements which are being helpful and useful in forming better
understanding of the interest rates, spending made by consumer and total employment which
would be helpful in examining current stages of economic cycle. Better understanding of the
insights would prove to be helpful for the investors as well as business too. In relation to Virgin
Atlantic Airlines, there are many economic life cycle stages which must be included such as
peak, expansion and contraction.
3. How can the government current intervention methods affect the selected business
It basically include various of individuals who mainly finds that the government is a very
crucial portion of the economy. In any circumstances, if government has capable to create the
more changes into the fiscal and monetary policy of the economy. It basically make an influence
the complete desire of the business. It can truly encourage the country currency which usually
appear not permanently in the profits of the organizations and distribute the prices but it
straightly reduce the value and create the rate of interest high(Hutomo, 2020). According to the
airlines of virgin Atlantic they have many more techniques for the participation of government.
Which basically create an impact on the business which are described as below:
Fiscal policy: The interest rate too, is mainly use to secure for the inflation in the
economy. It is very simple because, they can assist the person of the economy for the part of
inflation. It also support to provide good services to the consumer and also apply the rate of
interest through the federal reserve they usually undergo to increase them(Wang, Lu and Gregg,
2021). It also supports to lose more market in which it tends to get good inquiry in the economy
because of which it support to the business and peoples to collect high and purchase more. But
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the company funds are not similar and relatively deduct the inflation in the market economy and
the increase the amount of the capital is exterminated and it mainly useful to advanced the future
stage of government it create an impact on the market economy.
Monetary policy: It is basically a very strong policy in a similar way. It is highly distinct
and the government of nation can operate some high adequate control also with the policy of tax
due to which it can also the flowing of capital on the investment by providing the good status of
tax. It is the main consideration and it checks the more, unselected variations by restructuring the
monetary perspective(Libman, 2022). In the report of Virgin Atlantic airlines. It pressurized for
the good working by checking the relevant interest through which the money flow can move in a
good manner. It also confirm the good money flow for the investors and shareholders to begin
their company or it also improving the activities of airlines company by providing the
appropriate resources.
Furlough system: At the time of Pandemic country go through the whole lock-down, it
create a large impact on the full organization . The development of the organization is providing
this approach to the staff members through which it also providing the temporary holiday to the
workers due to the particular requirement of the organization along with this the whole firm is
sustain the best observation on the economy of market. In case of Virgin Atlantic airlines is
basically on the entity. So, that it truly confirm the best functioning and also remove the
unneeded cost of the enterprise at the time of pandemic situation. The crucial deliberation of
good functioning of the company. In that case it truly confirm that the more profitable situation
and stage of work job in the market economy(Liu and Lee, 2021). The airlines firm affirm the
good functioning of the organization. Apart from that it can also easily handle the production
cost.
4. 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 main part of the deliberation which confirms the good functioning of the firm but
also it involves some few of the challenges which is truly faced by the Virgin Atlantic airlines
they required to correct by the firm so, that it completely achieved in a adequate way which are
to be discussed below:
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Description of foreign policy, comparisons and government: It is the very crucial for
creating an impact by the government, rules and policies, relations, law and decisions which is
usually crated by the leaders it can also influence the labour, funds, arrangement of transportation
provision and the approach of education system(Norouzi, Maddah and Noferesti, 2020). In the
report of Virgin Atlantic airlines. It mainly deals with high loss in that case it truly confirms the
good functioning but it also leads to decline the whole functioning of the firm along with its good
working in the organization.
Cost productivity of the firm has been prevail and the big component of economics is
usually make an influence the airlines company. It basically create an impact on the financial
report of the airlines firm. If there is increasing in number of airlines company, it that
circumstance the value of fuel also gets high and generating a brutal figure(Parkinson, 2020). In
the report of virgin Atlantic airlines it mainly deal with the problem in which it reducing the
whole situation of incomes and the revenues of the entity.
Rate of unemployment: Basically, the most largest impact of pandemic, in airlines of
Virgin Atlantic is usually deal with the high rate of unemployed people, it mainly collapse the
opportunity of work job in few firms due to which the high deficit and deduction in profits of the
company. Afterwards, the person who are functioning in the company on a long-term and protect
the less job work. On that basis, it comparatively define its profession. So, on that note it acquire
more and live their life in a good way. If the firm concentrated on the simpler activities then, it
utilize some paths to reduce the whole functioning and remove the rate of unemployed people in
the company(Shah, 2020). It also helps in good functioning so, it maximised the more situation
of incomes in the business.
CONCLUSION
As it is concluded from the above report that the concept of macroeconomics usually
deals with the structure of economic and the whole functioning for the economy of market. There
are some few components which mainly influence the whole working of the organization and the
economy of market also it includes the inflation rate, economy results and the unemployment
rate. The economics life cycle is mainly assists in knowing the control of paying out and the
intake of high other components in the economy of market. Fiscal and monetary policy analyse
the flow of money and confirm the particular rate of interest to the individual. On that note it also
check the simple functioning and inflow and outflow of money in the market economy. The
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airlines company mainly deals with high influence in which they are dealing with increasing the
prices of fuel also with the high value of enterprise which are mainly executing in the similar
organization. Apart from this it also suggest the firm in respect of its good services in which it
handle the flow of products and services in the economy of market. It also check the more
achievements in the next future years.
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REFERENCES
Books and Journals
Dai, M., 2021, June. Short-term Inflation and Long-term Inflation of US Economy Since 2021.
In 2021 2nd International Conference on Internet and E-Business (pp. 165-170).
de Camargo Barros, G.S.A and et.al., 2022. Agriculture and inflation: Expected and unexpected
shocks. The Quarterly Review of Economics and Finance. 83. pp.178-188.
Dolmas, J. and Koenig, E.F., 2019. Room to Grow? Inflation and Labor Market Slack.
Geronikolaou, G., Spyromitros, E. and Tsintzos, P., 2020. Progressive taxation and human
capital as determinants of inflation persistence. Economic Modelling. 88. pp.82-97.
Gumata, N. and Ndou, E., 2019. Do Investors’ Net Purchases and Capital Retrenchment
Activities Impact the Monetary Policy Response to Positive Inflation Shocks?.
In Capital Flows, Credit Markets and Growth in South Africa (pp. 255-265). Palgrave
Macmillan, Cham.
Gumata, N. and Ndou, E., 2021. Has the Inflation Target Band Impacted the Natural Rate of
Unemployment in South Africa? Evidence from the Accelerationist Philips Curve.
In Achieving Price, Financial and Macro-Economic Stability in South Africa (pp. 339-
351). Palgrave Macmillan, Cham.
Hutomo, K., 2020. Inflation Effect, Interest Rate of Bank Indonesia Certificates (SBI) and
Economic Growth on Rupiah Exchange Rate in Indonesia. Pertanika Journal of Social
Sciences & Humanities. 28.
Libman, E., 2022. A simple model of some possible long-run adverse effects of inflation
targeting. Review of Social Economy. 80(2). pp.172-193.
Liu, T.Y. and Lee, C.C., 2021. Global convergence of inflation rates. The North American
Journal of Economics and Finance. 58. p.101501.
Norouzi, Z., Maddah, M. and Noferesti, M., 2020. The Role of National Development Fund in
Boosting Economic Growth and Curbing Inflation. Journal of Economics and
Modeling. 11(2). pp.1-27.
Parkinson, D., 2020. Inflation posts largest drop in 13 years. Globe & Mail (Toronto, Canada),
pp.B2-B2.
Shah, F.A., 2020. The Effect of Oil Prices and Exchange Rate on Inflation in Pakistan: A Pre
and Post Regime Transition Perspective. Experts Journal of Management Sciences. 1(1).
pp.29-44.
Wang, J., Lu, Z. and Gregg, P.M., 2021. Inflation of Okmok Volcano During 2008–2020 From
PS Analyses and Source Inversion With Finite Element Models. Journal of Geophysical
Research: Solid Earth. 126(10). p.e2021JB022420.
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