Macroeconomic Influences on Virgin Atlantic Business Outcomes Analysis

This report examines the macroeconomic elements influencing Virgin Atlantic's business outcomes, focusing on unemployment and inflation. It analyzes the impact of UK government interventions, such as fiscal and monetary policies, including the furlough scheme during COVID-19. The report discusses how the UK's economic growth rate affects the airline industry, considering economic life cycles and inflation rates. Furthermore, it addresses global challenges like foreign policies and relations, suggesting improvements for Virgin Atlantic to ensure better job opportunities and operational efficiency. Desklib provides similar solved assignments and resources for students.

INFLUENCES OF
MACROECONOMIC

Table of Contents
INTRODUCTION.......................................................................................................................3
TASK........................................................................................................................................3
Explain the macroeconomic elements and its influence on considered business outcomes...............3
How the present government authority’s intervention methods would be affecting the companies
and businesses...................................................................................................................................4
How the UK economic growth rate effect the chosen industry..........................................................6
Describe the at present global tests faced by the commercial and give suggestions on how to
overcome them in current time.........................................................................................................7
CONCLUSION...........................................................................................................................8
REFERENCES............................................................................................................................9

INTRODUCTION
The report prepared and developed as under takes in account concept which deals with
the performance, structure, decision making process and the behaviour of the business as a
whole. Economics would be considering unemployment level, inflation rate and economic output
within the economic environment and marketplaces (Alhamad, Junoh and Eneizan, 2019). Such
indicators of economic related performance are to be controlled and monitored by the business
enterprises, customers and government regulations as well. There is a big impact of COVID-19
on the overall functioning in the company. Virgin Atlantic Airlines which is a British airlines and
is located in Crawlwy, England in year 1984. It is managing its flights over 32 destinations over
the globe. This respective report would be covering the elements of macroeconomics and its
impact would be on the overall business. It also would be analysing the economic related growth
rate in UK. Hence, it would also examine the current government interventions which would be
affecting the overall working of the business enterprise. At last, it would also access the certain
challenges and hurdles which are being encountered by the companies and also mention the valid
suggestions in relation to overcome in the present duration of time.
TASK
Explain the macroeconomic elements and its influence on considered business outcomes.
Macroeconomic factors can be explained as the key elements which is an geopolitical
event, influential fiscal that are affecting the national and regional economy of UK territory.
These factors are expected to affect the economy as a whole and not only the chosen respective
individuals. On a major scope, unemployment and the inflation are considered two main
important factors which are described in the following:
Unemployment: It can be explained as a person who is in search of a job and has to base
for earning money and generating any sort of income for his or her living. It would be counting
ample of situations which result in such conditions of a person in environment thus it is
necessary for people to analyse and examine them and understand how they can be solved and
sorted out well in advance. As for now, people have lost their jobs because of higher recession in
the economic environment (Brown, 2018) (Cheng, Khim and Thai, 2018). In relation to Virgin
Atlantic, there is the carrier which has become as a lead as might be possible over the first flights
for surviving. It further laid off a percentage of 45% of its labours through which they can cut

down the cost and expenses by more than $530 million. For this it would be necessary in the
coming year such that they can comply with the changing strategy or policy in the marketplaces
and would be easily able to meet the alteration taking place in the economy. The tight labour
market would indicate that the wages would as a result make rise in the flights for talented and
new persons. They further initiated those 45 million persons would quit their present jobs in the
month of December which would perfectly define the level of issue. Such factors of
macroeconomic would have influenced the overall working of the Virgin Atlantic Airlines and
the economic conditions. The increase in the rates due to increase in the cost related production
and the lesser availability among the more talented employees (Hamid, 2020).
Inflation: It can be stated as the rate of rising prices over a certain period of time, it is
generally a broader measure which considers the rise in prices or the increase in the expense of
living in the territory. It is basically resulting from too much chasing to too less goods which
would affect the rise in prices. According to the Virgin Atlantic CEO, would be warning the
inflation and their higher costs. As such the supply related challenges, increase in labour cost,
price of flying more sustainably would be felt keenly by the organisation in this year, the
customers would foot the bill. But the CEO has warned that scaling up the whole amount of
sustainable aviation fuel which is currently 3 to 5 five times more expensive than the
conventional fuel which directly would be hitting the pockets of the CEO. They further added
that the airlines not the who will need to foot the bill for flying on more sustainable fuel which is
wholly going to be shared by all shareholders (Jongen, 2018).
How the present government authority’s intervention methods would be affecting the companies
and businesses.
There are persons who have identified the government as the major player in the
marketplaces. As the government authorities would be having the capacity and capability of
having huge alteration in the fiscal and monetary based policies which have affected the overall
functioning of the enterprise. They can in a better way boost the currency as it is necessary to
increase the corporate revenue, profits and income and share prices but lastly minimize the value
and this would result in spiking of interest rates. In relation to Virgin Atlantic Airlines there are
several methods of government interventions which would be impacting the companies are stated
as under:

Fiscal policy: To countercheck the rising prices, interest rate is one of the important
measures that is used. The reason for this is because they are able to stimulate the economic
system separately from the inflation. This counteract through interest rate is a viable option as it
helps in deducing them with the help of the authority of federal reserve, which is certainly not in
the favour of raising the interest rates. This builds a platform which provides quality services to
the end customer (Lehr, 2020). This essentially tends to have the greater losses at the
marketplace which leads to improved deliberation at the marketplace with the help of which they
incline to have entities and individuals to acquire more and this leads to greater purchases. But
this brings in assets bubbles in which is unlike the step-by-step deduction of the growing prices
at the market place and the vast magnitude of capital that is getting wiped out which brings up its
use as refined to the next level the governance can cause greater determinants in the activity.
Monetary policy: This on the same page is the most effective policy, but also the most
inaccurate. The governance can regulate this with some level of control with the help of various
tax policies so that this can help them distribute the capital to some investments by apportioning
efficient tax condition. This is one of the most important intellections that helps ensuring huge
changes by altering and changing the money related viewpoints. With relation to the Virgin
Atlantic Airlines, these are forced to attain improved work cultures by ensuring the right amount
to be market as the interest rate so that individuals who are liable for leading the movement of
wealth can be guided and the currency flows on the accurate path, ensuring that the stock owners
and the people who are investing can get the funds required by them to commence the projects
and the operation's needed to boost the growth and functioning of the airlines (López-Robles and
et.al., 2019).
Furlough scheme: The covid-19 lock down lead all the different industries dreaded to a
critical blockage in their operations. Due to this the aviation industry came with a proposal for
their workers, which allows them with a transitory leave to their employees on the particular
requirements of the company which has led to a better conversation and contemplation of the
aviation company in the marketplace. With relation to Virgin Atlantic Airlines, their main focus
is the right strategy of business which can help them have better working conditions and
evacuation of redundant expenditure which are not an crucial cost for the company in this state
of the coronavirus. The main aspect for the company is better working conditions which can
help them rightly ensure greater margin of gain and inflated job opportunities in the industry.

Their main aim is to ensure effective and efficient working so that they can control and manage
the production expense for the airlines.
How the UK economic growth rate effect the chosen industry.
The UK has the fastest growing economy as individuals have higher expectations for
everyday comfort and buy for long-lasting endurance. Due to the impact of COVID-19, it has
impacted business as there was a massive 9.4% drop over the extended period of 2020 due to
widespread wellbeing restrictions and the pandemic. In 2021, UK GDP will grow at an annual
rate of 7.5% (GDP first quarter indicator, UK: October-December 2021). There are a few ways
to see the impact of the UK currency development rate in Virgin Atlantic described below:
Economic life cycle: It is the general state of the economy that has experienced the four
saints of development, peak, compression and box in repeated instances. There are a few factors
that help to understand GDP, loan fees, customer spending and overall business to examine the
ongoing phase of the currency cycle (economic cycle, 2022). Better visibility to promote
knowledge points can be very helpful to businesses and financial backers. When set up to Virgin
Atlantic, the currency life cycle has four stages, as follows:
 Expansion: At this stage, the economy is developing moderately, financing costs are
generally low, creation is rising, and expansion pressure is increasing. While heading to
Virgin Atlantic, they faced expansion due to growing interest in the commercial hub and
rising fuel bills.
 Peak: The growth cycle is reached when development reaches its most extreme rate,
which also introduces some unbalanced features in the economy that should be corrected.
This is the point at which the association reaches its highest level in terms of
productivity, but it also contributes to the uneven activity of Virgin Atlantic.
 Contraction: After the peak period, as development slows, business declines, and costs
deteriorate, remediate with specific compression times. This is the stage where Virgin
Atlantic takes remedial action so they can deal with the error.
 Trough: This is a critical moment when the economy falls into a trough and economic
development begins to recover. This is where Virgin Atlantic began to recover from the
business by understanding the business environment.
Inflation: In the UK, as individuals face dramatic changes within the market, high
growth occurs when organisations create expenses that increase the cost of air tickets, which

prompts expansion within the economy. This expands in the UK economy as rising fuel costs
typically raise ticket costs (Neary and et.al., 2018) (Nica, Manole and Stan, 2018).
Unemployment rate: In the current business sector landscape, there are a number of
factors that affect business and the economy. In the UK, where unemployment has risen to the
top due to the huge impact of COVID-19, the goal is that they can properly warrant better
vigilance.
Describe the at present global tests faced by the commercial and give suggestions on how to
overcome them in current time.
This is an important idea to ensure that the organization works better, but some of the
difficulties that Virgin Atlantic is working on should be corrected by the organization so that
they can adequately fill them in an appropriate way, which are understood as follows:
Nuances of Foreign Politics, policy and relations: It is often influenced by legislative
issues, methods, regulations, and linkages, and choices are made by pioneers who affect jobs,
sketches, transportation bases, and school systems. When Virgin Atlantic was formed, they faced
huge losses, so they could properly guarantee better jobs, but generally limit the general work of
the organization and guarantee better operations (Parr, 2018).
Unemployment: Virgin Atlantic faces job losses due to the huge impact of COVID-19,
as their huge freedom and general interest in flying operations declines, reducing potential jobs
in the organization in the first place. However, after a long-time span, people working in this
field have been working less, so slowly changing their mission so they can get and go on to live a
better life. If organizations are centred around simple activities, they can reduce general work
and deal with unemployment within the association. It also helps to work better, so they can
guarantee higher benefits in the association.
Fuel efficiency: These expenses have been one of the main financial factors affecting the
aircraft business. It essentially affects the currency arrangement of the operator organization.
Due to the increase in the number of aircraft carrier organizations, fuel costs are further
expanded, further forming an infinite loop. In choosing Virgin, they were faced with limiting
general interest and revenue within the association (Sbrana and Silvestrini, 2019).
Passenger comfort and experience: The aviation industry is aid-driven, and its
prosperity depends on passenger satisfaction. The test Virgin Atlantic is looking for is that in the
end there are no identical passengers and customers in a particular area are forever disappointed,

so this has prompted the organization to guarantee consistency, amazing security, and in-terminal
lines and simple customer service There is no problem and the sky is the limit there (Trebeck and
Williams, 2019).
Virgin Atlantic's suggestion and decision is to restart its management by taking advantage of
all benefits so they can stay away from the adverse effects of aviation safety within the
association. Different companies also support the organization with subsidies so that they can
continue their management normally and can offer different job opportunities within the market.
In this way, they can help the organization and the public, as enough vacancies contribute to a
better expectation of an individual's day-to-day comfort, and they guarantee better management
to travellers through proper canning, they can guarantee to give their more interests (Willermark,
2018).
CONCLUSION
From the above prepared report, it can be asserted that the Macroeconomic is the foundation
of study as which economy and structure would be helpful and contributing in the running and
functioning of business as a whole. There are numerous factors and elements which would affect
the functioning and working of the business places which can be explained as inflation rate,
unemployment and economic outcomes as well. Economic life cycle would be helpful in
understanding consumption, spending power and many other policies which would be helpful in
contributor of development of economic in better conditions.

REFERENCES
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