BMP4003 - Analyzing Macro-economic Influences on Virgin Atlantic

This report examines the influence of macro-economic factors on Virgin Atlantic Airlines, focusing on the unemployment rate and inflation as key determinants of business outputs. It analyzes the impact of the UK's growth rate, considering the economic life cycle, GDP, and inflation. Furthermore, it explores how government interventions, such as fiscal and monetary policies, including the furlough scheme, affect the airline. The report identifies current global challenges faced by Virgin Atlantic and provides recommendations for overcoming them. It concludes by summarizing the key findings and their implications for the airline's strategic decision-making in a dynamic economic environment.

BSc (Hons) Business Management
BMP4003 Business Environment
Assessment 2
Influences of Macro-economic
Activity
Submitted by:
Name: Viorica Choisa
ID: 2015071
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Contents
Introduction 3
An explanation of two macro-economic factors that the chosen
business will need to consider and the influences these could have
on its business outputs (macro-economic factors e.g., economic
output, unemployment rates, inflation etc.) 3-5
How will the UK current growth rate impact on the chosen business
(give reference to economic life cycle, GDP, inflation,
unemployment rate) 5-6
How can the government current intervention methods affect the
selected busines? (e.g., fiscal and monetary policies, furlough
scheme etc) 6-8
What are the current global challenges facing by the chosen
business and recommendations on how to overcome them in this
current time? 8-9
Conclusion 9
References 10
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Introduction
In this case study it mainly describe the main theory of macroeconomics
which usually finds the structure, outputs, procedure to make decisions and the
essence of whole market economy. The economics theory include unemployment
rate, inflation rate along with the performance of market economy. Here are few
indications of highly efficiently view the outputs of firms in the economic together with
the political parties and consumer. During the period of COVID-19 the overall
functioning of the enterprises is more affected. The virgin Atlantic airlines which
mainly the part of the British airlines was setup in crawlwy, England in the period of
1984(Alshuwaiee, AlShammari and Al-Mubarak, 2020). They was establishing its flights
in 32 places over the complete world. The report is usually shelter the overall
macroeconomics factors it generate the effect on the overall outcomes of the
organization. It mainly analyze the growth rate of the economic in UK. Also, it
evaluate the current government involvement which basically create an impact on
the whole company usefulness. In the end, they use the method of some particular
challenges which are faced by the entity and give some positive recommendation in
order to retrieve the current duration of time.
An explanation of two macro-economic factors that the
chosen business will need to consider and the influences
these could have on its business outputs (macro-economic
factors e.g., economic output, unemployment rates,
inflation etc.)
The most important aspect of macroeconomics components which mainly
categorize the fiscal policy of the nation. Which make an impact in the condition of
geopolitical and it usually influence the regional location and UK nation economy.
The main factors of the economy create an impact on the overall country which is not
only only chosen by the person(Chaney and Morath, 2020). Basically, the
unemployment rate and the rate of inflation these both of the terms are the two major
economy factors it discussed as below:
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Rate of unemployment: it includes the type of persons who are currently not working,
unemployed or determining the job which are suitable to them and not able to find
the appropriate position of job work. In this factor it also include the group of persons
who are not acting their work job with duly impact of some factors. In current time
situation, the COVID pandemic create a very large impact on the unemployment rate
in the market economy of UK nation. At the current time situation, most of the people
loose its job work because of increase in recession time period in the economy of
market. In context of the airlines they have a transporter which usually leads at the
time period of its very first flights for its aliveness. They usually ceased 45% of its
workers in the company and also deduce the cost which are the base of its $530
billion. In future the agility will be necessary so, that it can simple to follow up the
fluctuations of strategy in economy of market and they can easily set the fluctuations
taken up in the market economy. The strict labor market of the economy categorize
the wages it will be maximized in the airlines for the newly and intelligent
people(Choi, 2019). It also included that the 4.5 million individual in the December
month left its work job which positively define the issue of scale. The
macroeconomics factors make an influence the whole functioning in the airline of
Virgin Atlantic in the market economy. It maximize the price because of the increase
in the cost of production and it decline the existence of intelligent workers in the
company.
Rate of inflation: This is the rate which increases the price for a particular period of
time in the market economy. It mainly examine in larger form like price maximization
or the cost of living of the nation. The performance of choosing demand to decline
the goods which usually create an impact to make more price of the good. According
to the case study of Virgin Atlantic. It recommend that the inflation rate will run at
more cost. Due to the supply challenges, more labor cost, prices of airlines highly
leads to be perceive discriminating by the organization in this annual year. The
customer of airlines will bound the bill(Deka, 2021). But in that case the suggestion of
CEO which based upon the overall worth of endurable accretion fuel in current 3 to 5
times more priced than the standard fuel which currently utilize the pockets of
CEO( the CEO of Virgin Atlantic recommend the rate of inflation will supported high
cost, fares in 2022). It involve airlines which usually not raise that who have to bound
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the bill of airlines with more endurable fuel which is completely going to be share
among all the stock holders of the entity.
How will the UK current growth rate impact on the chosen
business (give reference to economic life cycle, GDP,
inflation, unemployment rate)
The nation of UK is one of the fastest growing expanding market economy in
which the peoples are undergo the better standard of living and generate good for its
aliveness. After the negative impact of COVID pandemic, it also influence the
companies it has a large 9.4% reduce in the specific year 2020 because of the
limitation in public health at the time of COVID-19. During the period of 2021, Gross
domestic product (GDP) of the country watched the annually 7.5 % increment(Inaba
and Nakanishi, 2022). There are few approaches which usually make an influence the
rate of future growth of economic it can be displayed in the airline Virgin Atlantic that
is discussed below:
 Supply chain of Economy: This is the state of overall economic it usually go
with the four stages in cyclical artifact and the development, peak, depression
and contraction. Here are few factors which provide an assistance in
understanding the gross domestic product(GDP), interest rate, consumer
spending and the complete unemployment rate which helps in justifying the
current stage of cyclic economy in 2020. Better understanding and optical
picture are very useful for the enterprise and the company investors also. In
the context of Virgin Atlantic airlines there are four various stages of supply
chain market economy that are given below:
◦ Extension: This is the stage in which the economy growth is high and the
interest rate lead to declines, it usually express the maximization in
manufacturing and the pressure of inflation is high(Lee, Park and Kim,
2021). In case of Virgin Atlantic airlines, it deal with the inflation because of
more demand in the market place along with the high cost of fuel.
◦ Peak: if economy growth objective their rates of interest, in that case the
peak of the supply chain is reach to create the inequality in the market
economy. Which mainly needed to be rectified. This is the important part
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for the company to accomplish the condition of profits at the time period of
peak. But it lead to create inequality in the projections of Virgin Atlantic
airlines.
◦ Contraction: when height is completed, then the correction which is
occurred mainly to the specific contraction period because of its slow
development, it reduces the rate of employment and price variations. This
is the stage in which the correction has been made by Virgin Atlantic
airlines. So, that it can simply eliminate the issue.
◦ Depression: It was the main part in which the market economy targeted
the reduce point and grow to start recover in the economy. It is very crucial
point of Virgin Atlantic airlines to start from the enterprise by understanding
the entity environment.
Unemployment rate: this was the current market condition, in which there are some
various factors. Which increasingly make an impact on the corporate economy(Li and
Suominen, 2020). The unemployment rate highest at the time of height through the
influence of COVID Pandemic in the country UK. In that case it appropriately ensure
the better survey in the market.
Rate of inflation: In the UK nation, if the rate of inflation is more than its high the cost
of manufacturing for the firm leads it increases the tickets of airlines prices which
leads to get inflation within the market economy. If the peoples of the market dealing
with the high fluctuations along with the high fuel prices then it tends to maximize the
airlines ticket prices and its generate inflation in the market economy.
How can the government current intervention methods
affect the selected busines? (e.g., fiscal and monetary
policies, furlough scheme etc).
It mainly involve some peoples who basically identified the government is a
main part of the market economy. In case, if political party has able to make the
more fluctuations into the monetary and fiscal policy of the country. Which mainly
generate an impact on the overall utility of the enterprise(Mihola, Bulatnikov and
Slemnik, 2020). They can positively promote the currency which arise temporarily in
the income of the business and share prices but it directly deduct the amount and
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generate the interest rate more. In case of Virgin Atlantic airlines it have much more
methods for the government involvement which usually make an influence on the
firm that are given below:
Fiscal policy: The instrument of interest rate is basically utilized to protect for the
inflation. This is easy because, it can help out the individual of the economy for the
component of inflation. They also leads to give better services to the customer and it
also put the interest rate due to the federal reserve it mainly enduring to maximize
them. They also leads to lose high market in which they tends to become good
investigation in the economy due to which it support to have the enterprises and
individuals to gather more and tends to buy more(Lichocki, 2021). But the firm assets
are not same and comparatively reduce the inflation in the economy of market and
the high worth of the capital is destroyed and it usually helpful to civilized the
upcoming level of government it make an influence on the market.
Monetary policy: It is usually the most powerful policy in a same path. This is more
definite. The country government can execute various more precisely control along
with the tax policy duly which they can express the capital flowing on the investments
by giving the better tax status. This is an important consideration and it ensures the
higher, non -selective changes by reorganizing the monetary viewpoint(Valera and
Dean, 2021). In case of Virgin Atlantic airlines, it forced the better functioning by
ensuring the adequate interest due to which the flow of money can move in the
correct path and it also ensures the better flow of money for the investors and the
shareholders to start its firm or they also bettering the tasks of airlines industries by
giving relevant funds to them.
Furlough approach: During the period of COVID pandemic nation suffer the fully
lock-down, it generate a big influence on the complete firms. The growth of the firm
is giving this scheme to the workers due to which they are giving the non-permanent
holiday to the staffs through the specific necessity of the company also which the
complete organization is undergo the better contemplation on the market(Lihn, 2019).
In case of Virgin Atlantic airlines it usually focused on the company so, that it
positively ensure the good working and also eliminate the unnecessary expenditures
of the organization usually at the hard period of COVID -19. The important
consideration of better working of the entity. On that basis it positively ensures that
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the high profitable condition and position of Job work in the economy of market. The
industry of airlines substantiate the better working of the enterprise. According to that
it can simply manage the cost of manufacturing.
What are the current global challenges facing by the
chosen business and recommendations on how to
overcome them in this current time?
This is the most important consideration it ensures the better working of the
company but there are some various of challenges which is duly faced by the
Airlines of Virgin Atlantic it needed to be rectified by the enterprise so that it fully
accomplished in an appropriate manner that are given below:
Explanation of foreign policy, relations and government: It is most importantly
influenced by the political party, obligations and policies, law, comparison and
decisions which is mainly generated by the supervisor they can also create an
impact on the labor, resources, configuration of transport facility and the scheme of
education system(Lucaci and Sarafescu, 2020). In case of Virgin Atlantic airlines, it deal
with more loss on that note it positively ensures the better working but it support to
deduce the overall working of the organization and also ensuring the better
functioning.
Efficiency of fuel: The expense of the company has been remains and the major
factor of economic it basically create an impact on the industry of airlines. It mainly
influence the report of the industry airlines. If the maximization in number of industry
airlines, in that case the amount of fuel also becomes more and creating brutal
shape. In case of Virgin Atlantic airlines it usually deal with the issue in which they
are declining the overall condition of profits and the company revenues.
Unemployment rate: Subsequently, the biggest effect of COVID pandemic, Virgin
Atlantic airlines, deal with the more unemployment rate which usually breakdown the
opportunity of job work in some companies through which the more loss and
reduction in incomes of the enterprise. After, which the individual who are working in
the entity on a long-term basis are secure to work job low(Malatji, 2021). So,that they
relatively deviate its profession. On that basis it obtain high and live its life in a better
manner. If the company focused on the easier tasks then, it use various manner to
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deduct the overall working and eliminate the unemployment rate in the firm. They
also assists in better working so, it increased the high condition of profits in the
enterprise.
Conclusion
The above report concluded that the theory of macroeconomics mainly deals
with the artifact of economic and the overall working of the market economy. Here
are some various factors which create an impact on the overall functioning of the firm
and the market economy along with this it involves rate of inflation, unemployment
and outputs of economy. The supply chain of the economics basically helps in
understanding the power of spending and the consumption of more another factors
in the market economy. Monetary and fiscal policy measure the movement of money
and ensure the specific interest rate to the people. On that basis it can ensure the
easy working and money flow in the economy of market. Airlines industry deals with
the more impact in which they are dealing with maximizing the fuel prices also with
the more worth of entity which are usually organizing in the same firm. Afterwards, it
also recommended the company regarding its better services in which it maintain the
movement of goods and services in the economy of market. They also ensure the
high accomplishment in the future upcoming years.
References
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Alshuwaiee, W.M., AlShammari, N.N. and Al-Mubarak, N.W., 2020. Is unemployment
caused by a socioeconomic phenomenon in the case of Kuwait?. Global Business
and Economics Review. 23(4). pp.412-431.
Chaney, S. and Morath, E., 2020. April unemployment rate rose to a record 14.7%. Wall
Street Journal, May. 8.
Choi, C., 2019. An Empirical Study on Transition and Unemployment. KDI School of Pub
Policy & Management Paper.
Deka, D., 2021. Educated Unemployment in Assam (India).
Inaba, C. and Nakanishi, N., 2022. Effects of Globalization on Educational Choice and
Unemployment under Search Friction (No. 2205).
Lee, J., Park, Y.J. and Kim, S., 2021. Unemployment rates and nonprofits' volunteer use: A
study of US charitable organizations (WITHDRAWN). In Academy of Management
Proceedings (Vol. 2021, No. 1, p. 11474). Briarcliff Manor, NY 10510: Academy of
Management.
Li, Y. and Suominen, M., 2020. Equity Returns, Unemployment, and Monetary
Policy. Unemployment, and Monetary Policy (November 19, 2020).
Lichocki, A., 2021. Analysis of unemployment of people under 25 in the Baltic states in
selected five years (2005, 2009, 2013, 2017, 2019) (Doctoral dissertation, Kolegium
Nauk Ekonomicznych i Społecznych w Płocku).
Lihn, S.H., 2019. Real-time Recession Probability with Hidden Markov Model and
Unemployment Momentum. The R Journal, Forthcoming.
Lucaci, A. and Sarafescu, M., 2020, April. ENTREPRENEURSHIP EDUCATION: A TOOL
FOR REDUCING UNEMPLOYMENT AMONGST YOUTH. GOOD PRACTICES
IN EU COUNTRIES. In The 16th Economic International Conference.
Malatji, T.L., 2021. Unemployment and Regional Human Mobility; All Roads Lead To
South Africa. African Journal of Development Studies (formerly AFFRIKA Journal
of Politics, Economics and Society). 11(3). pp.169-186.
Mihola, J., Bulatnikov, O. and Slemnik, L., 2020. Analysis of non-accelerating inflation rate
of unemployment in the Czech Republic.
Valera, M.L.G. and Dean, A.R.R., 2021. Analyzing the Unemployment Hysteresis in the
Philippines using the VAR Model. Journal of Global Business and Trade.17. pp.17-
25.
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