BMP4003 - Macroeconomic Influences on Virgin Atlantic Airlines

This report examines the influence of macroeconomic factors on Virgin Atlantic Airlines, focusing on the UK economy. It elaborates on key macroeconomic items such as unemployment and inflation rates, detailing their impact on the airline's business performance, including workforce reductions and increased operational costs. The report analyzes how the UK's economic growth rate, GDP, and government interventions like fiscal and monetary policies affect the airline. It also addresses current global challenges faced by Virgin Atlantic, such as supply chain issues and rising fuel costs, and provides recommendations for overcoming these challenges. The analysis includes references to the economic life cycle and the impact of the COVID-19 pandemic. The report concludes by summarizing the key findings and emphasizing the importance of macroeconomic awareness for business sustainability. Desklib provides similar past papers and solved assignments for students.

Influences of
Macroeconomic
Activity

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Elaborate the macro-economic items, factors and their impact or affect on its business
performance or outputs...............................................................................................................1
2. How will the current growth rate of UK affect the chosen business (give reference to
economic life cycle, GDP, inflation, unemployment rate)..........................................................3
3. In what ways government authorities present intervention methods could affect the chosen
business enterprise? (e.g., fiscal and monetary policies, furlough scheme etc.).........................4
4. What are the current global challenges facing by the chosen business and recommendations
on how to overcome them in this current time............................................................................5
CONCLUSION................................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
The case of macroeconomics is a branch of study in which it consider in account of
performance, process of decision making, structural behaviour of market economy fully. The
Concept of economics considered variations in the rate of unemployment, outcomes of market
economy and the rate of inflation predominant in the place of market(Chakrabarti and
Mukherjee, 2020). It includes some of the signals which are mainly showing the performance of
economic that are highly observed in a very effective manner from the business firms, customers
and political parties also. It create a major impact and highly influenced the market economy at
the time of pandemic situation it majorly effect the smooth working of the company. The British
airlines of UK which named as Virgin Atlantic airlines along with its main office that are
situated in Crawlwy England in 1984. They are executing their flights in 32 places over the
entire globe. This case of Virgin Atlantic airlines is mainly created for covering the main items
of macroeconomic concept and its how it influence the whole company. It basically analysing
the rate of economic development in the UK nation. Also it usually estimating the current
involvement of government that majorly influencing the complete working in the field of
organization. At the end, it examine some problems and disruptions that are normally facing in
the organization at the time of working and provide the appropriate recommendation to solve the
problem of current condition in a specific point of time.
MAIN BODY
1. Elaborate the macro-economic items, factors and their impact or affect on its business
performance or outputs.
The items of macro-economic are mainly described along with its key characteristics that
is an event of political economy, is directly influence the fiscal policy which would be majorly
creating an impact on the national and territorial conditions of economic in UK nation. This
items are anticipated to create an impact on the market economy as entirely it not just for the
specific and some peoples(Darban Fooladi, Dehdar and Abdoli, 2021). Mainly, the rate of
inflation, unemployment rate these are the major two items of macro-economic which are
described as below:
unemployment rate: This factor of macroeconomics define those people who have no income
source and finding the a suitable job according to their knowledge and skills. It also consider
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some people who are not capable to perform the job due to many other components and items
also. In current time period pandemic also create a very big impact on the unemployment rate of
UK country also. Now, individuals of the UK country left their job because of the negative
environment and health related problems also but some of the people loose its work job because
of the low resources present in the market economy(de España, 2020). In context of Virgin
Atlantic airlines, there is the flights that leads to be possible at the time of the first wave of
corona virus for endurance. It also cut off from the 45% of their workers, labours through which
it can reduce the expense which occurrence from the base level is increasing higher than the
$530 million. Because of this the gracefulness would be significant and required in the future
years and it can be mereged with the another plans and obligations in the place of market and it
would be capable to achieve the variations is high simpler and easiest way in the environment.
The workers of market show the wages which would higher in the flights for the mindful and
new individual. It further included that 45 million category of people would be leaving their
work job from the place of market in December month it can easily explain the level of the
problem.
These macro-economic items have mainly create an impact on the whole functioning and
working of the organization Virgin Atlantic airlines and its culture also. Higher the rates leads to
increase in the manufacturing cost and it reduce or low availability of mindful individual or staff
members.
Inflation rate: It can also be define as the increasing rate over a specific time duration, it is
mainly a big analysis which counts the maximization in the rates and higher the living
expenditure in the country(Eichenbaum, Rebelo and Trabandt, 2020). It is mainly show the
outcomes of increasing to much demand and anticipation of too low products that create an
impact on the more price level. In case of Virgin Atlantic airlines the CEO of the company give
information related to the inflation which usually leads to drive the higher expenditures. In case
of supply based challenges, it maximized the labour based cost, flying prices is highly
supportable way will be felt piercing by the company in this annual year. The customer of the
airlines would foot the bill. But the company CEO informed about the scaling of the whole
amount of supportable collection related fuel. Which is mainly 3 to 5 times more costly when it
related with conventional fuel it actually influence the resources of the Company CEO. It also
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included and considered in account that the airlines not have to foot the bill for flying on highly
supportable fuel that it also need to be shared whole scenario with the company shareholders.
2. How will the current growth rate of UK affect the chosen business (give reference to
economic life cycle, GDP, inflation, unemployment rate)
According to the analysis being carried out, it is being analysed that the UK economic rates
raised 7.5% in year 2021 and the GDP took a raise by 1% in three months. UK has a expectation
for daily comforts which are according and linked to respective individuals, it is a developing
industry(Futagami and Sunaga, 2022)(Haldane and Turrell, 2019). The effect of COVID- 19
emergency has affected various businesses that is at a percentage causing destruction of 9.4%
fall constantly in year 2020 that is likewise being measures and reflects the well being of an
individual person. UK individual have faced a huge effect due to situation like pandemic and
therefore it has also resulted to adverse effects ion UK economy as well. There are some sources
which are being accessed by Virgin Atlantic Airlines which would enormously affect the
financial development rate.
Gross domestic product: It is also stated as GDP, that measures the production and value of
goods and services in the territory over a specific time frame. The estimated gross domestic
product in context of UK has been released on a monthly basis which is also called as short term
based indicators. The GDP also grew by a percentage of 1% in year 2022 that is being
incremented by travel agencies.
Inflation: Inflation is being referred to the rates which rise the average expense or cost of goods
and services in economic environment for a stated period of time. Inflation is generally used for
measuring the overall increase in price and cost. In other language it can be explained as the rate
which increases the expenses and cost of goods for a specific time span(Kou and Song, 2018). It
can be defined as a situation which tool places when the demand for related commodities and
services tool a rise. Virgin Atlantic Airline inflation prices or rates is leading due to having the
vast pricing in the marketplaces. It is thus not counted as a good condition for the company in the
long run thus the company must look after the matter for better working and functioning.
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3. In what ways government authorities present intervention methods could affect the chosen
business enterprise? (e.g., fiscal and monetary policies, furlough scheme etc.)
It is being observed and noticed that few people or persons play a vital role in the economic
environment and marketplaces the reason being they have the capability and capacity to alter the
working environment and policies which would be taken in account the monetary and fiscal
policies also consists of the operational function as a whole in competitive environment(Li, Xu
and Bai, 2018). IT is helpful and useful ion boosting up of profitability, interest rates and
currency related work as well. In context of Virgin Atlantic Airlines, there are various sort of
policies of government regulations which would be affecting the business enterprise. The
methods are explained as under:
 Monetary policy: It is explained as a set of action which is helpful in having a control
over the quantity of money that is available in the economy and would also serve to be
useful in economy and also monitor the channels who are supplied by new money. In
other words, it is indicating towards the instruments which would control the central
banks for maintaining the rates for instance supply, demand, interest rates and money as
well. It is a money supply that is falling when the rates change. IT is being set by the
central banks and which would change the money supply and interest rates. Virgin
Atlantic Airlines are generally focused on effective working of the company which would
help the business by large variation in monetary based policies. Virgin Atlantic Airlines
would be measuring the improvement in working which can predict the interest rates of
person which can be an examination of flow of money in right direction.
 Furlough scheme: It can be refereed to the leave which is taken on a temporary basis and
are taken into consideration by employees for some sort of situational needs, wants and
demands or it might be because of economic conditions of people working in company. It
can be for long term or short term(Nakajima and Takahashi, 2022). This program gas
been developed for supporting workers and employees in a COVID -19 situation, where
employees would be able to take temporary leave according to rising situation. In relation
with Virgin Atlantic Airline, they would be rendering such schemes for top level
workers as well as employees where they would be able to take such leave according to
temporary base. It is beneficial for the organization by having lead in the industry. It is
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also helpful for Virgin Atlantic Airline to ascertain better working from their engaged
employee work force which is beneficial for the business(Sotoudehnia Korrani,
Ahmadshadmehri and Razmi, 2020). This is a approach where employees would be able
to access leaves and improvise their working skills according to profitability of the
organisation.
 Fiscal policy: It can be explained as a policy which can be used for government taxation
based policies and spending for creating the economic based conditions, that includes the
demand regarding unemployment, growth, inflation rate, commodities and services as
well. The present budget balance post, the rules are the combination among two or three
where prediction of the overall gross domestic product would exceed by a percentage of
3% where the government would be able to meet the rule of a percentage of 5 of GDP.
Virgin Atlantic Airlines has a bigger loss in the marketplaces by comparison with other
fiscal related policies where the government authorities would be able to cover the loss of
GDP in the huge markets(Nam, Lee and Jeon, 2021). The policy has been observed to
target the government debts and also would be helpful in analysis the government current
developed budget. The government called it primary fiscal rule, where the debt rule
would share in the territory at three times in a financial year. The present budget of
government shall be surplus or extra for forecasting time period.
4. What are the current global challenges facing by the chosen business and recommendations on
how to overcome them in this current time
This is one of the most significant which ensures the better working of the organization
but also it includes some few challenges which is directly faced by the Virgin Atlantic airlines
they need to improve by the company so, it helps to wholly accomplished in a appropriate
manner which are to be described as under:
Cost efficiency of the company has been predominated and the major factors of the economic is
mainly create an impact on the airlines firm. It mainly influence the financial document of the
airlines industry(Pezoldt and Koval, 2018). If it shows maximizing in number of airlines
industry, then in that case the worth of the fuel also becomes more and creating a brutal value. In
the case of Virgin Atlantic airlines it usually face the issue in which it declining the overall
condition of profits and revenues of the enterprise.
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Unemployment rate: The pandemic in UK nation create a big impact on the airlines industry of
Virgin Atlantic it mainly face the more unemployed rate of individual, it usually break the
chances of job work in some companies through which it face high loss and reduction in incomes
of the organization. Apart from this, the individual who are working in the enterprise on a long
term basis and secure the low work job(Roberts, 2018). In that case, it relatively explain their
profession. So, on that basis it take over high and live their life I a better way. If the company
focused on the easier tasks then, it use some ways to decline the overall working and eliminate
the unemployed individuals rate In the firm. It also assists in better working. So, it increase the
highest condition of profits in the entity.
CONCLUSION
The conclusion of the report is that it show the concept of macroeconomics which mainly
faced the structural economic and the overall working of the economy. It includes some few
factors which create an impact on the overall functioning of the enterprise and the economy also.
It mainly involve the rate of inflation, outcomes of economy and the rate of unemployment. The
supply chain of the economy is usually helps in understanding the power of spending and include
more another factors in the market economy. The policies which involves fiscal and monetary
examine the money flow and ensure the specific interest rate to the people. Apart from this it
ensure the easier working and in an out of money in the economy. The industry airlines usually
faced the more effect in which it are dealing with maximizing the fuel prices also the more value
of firm which basically operating in the same company. At the end it also recommend the
company in order of their better services in which it maintain the movement of goods and
services in the market economy. Also it ensure the high accomplishment in the upcoming years.
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REFERENCES
Books and Journals
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Analysis. South Asian Journal of Macroeconomics and Public Finance. 9(2). pp.139-
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Development Functions under the Information Environment Risk
Conditions. Macroeconomics Research Letter. 16(31). pp.57-84.
de España, B., 2020. Escenarios macroeconómicos de referencia para la economía española tras
el Covid-19. Boletín económico, (2/2020), pp.1-35.
Eichenbaum, M., Rebelo, S. and Trabandt, M., 2020. The macroeconomics of epidemics.
mimemo. Freie Universität Berlin.
Futagami, K. and Sunaga, M., 2022. Risk aversion and longevity in an overlapping generations
model. Journal of Macroeconomics. 72. p.103415.
Haldane, A.G. and Turrell, A.E., 2019. Drawing on different disciplines: macroeconomic agent-
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Kou, X. and Song, Y., 2018. Evaluation of innovation capacity of science and technology parks
in China based on data envelopment analysis--a case study of Beijing-Tianjin-Hebei
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knowledge, overconfidence and financial be‐haviors]. Macroeconomics. 3. pp.33-47.
Nakajima, T. and Takahashi, S., 2022. Uninsured idiosyncratic risk and the government asset
Laffer curve. Journal of Macroeconomics. 71. p.103391.
Nam, E.Y., Lee, K. and Jeon, Y., 2021. Macroeconomic uncertainty shocks and households’
consumption choice. Journal of Macroeconomics. 68. p.103306.
Pezoldt, K. and Koval, A.G., 2018. Challenges of the Theory of System Transformation in
Economics. Questions of Economic Theory. Macroeconomics, (4).
Roberts, J.M., 2018. An Estimate of the Long-Term Neutral Rate of Interest. FEDS Notes,
(2018-09), p.05.
Sotoudehnia Korrani, S., Ahmadshadmehri, M. and Razmi, S.M., 2020. Studying the Effect of
Green Tax on Fossil Energies Consumption (Gasoline, Natural gas and Oil gas) in Iran
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(RDCGE). Macroeconomics Research Letter. 15(29). pp.73-97.
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