Virgin Atlantic Airlines: Macroeconomic Impact and Solutions

This report provides a comprehensive macroeconomic analysis of Virgin Atlantic Airlines, examining key factors such as inflation, unemployment, and the UK's economic growth rate. It assesses how these factors, along with government engagement methods like the furlough scheme, monetary policy, and fiscal strategy, influence the airline's business results. The report also identifies recent global challenges facing the company, including issues related to global policies and relationships, and proposes potential solutions. By analyzing the economic life cycle stages (expansion, peak, contraction, and trough) and their effects on Virgin Atlantic, the study offers insights into the company's operational activities and strategies for navigating macroeconomic difficulties. Desklib offers a variety of solved assignments and resources for students.

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Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
An summary of 2 macroeconomic components that the chosen firm must investigate, and also
the potential implications such factors could have on its business results..................................1
What impact will the current UK rate of growth have had on the chosen business....................3
What effect will the government's current methods of engagement have had on the selected
organization.................................................................................................................................4
What are the recent global difficulties which the chosen company is facing, and how can
that be addressed right now.........................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The examination of output variations, borrowing costs, increased prices, international
market rates, and unfulfilled trade commitments is known as macroeconomic policy (Abbasi, Ali
and Bibi, 2018). It helps to the examination of cost fluctuations in a specific corporate function
and assists in establishing marketplace safety. This also includes governmental measures to
combat stagnating and inflation that leads to the calculation of the balance of trade that causes a
deviation from the supplied stability and provides solutions. All macroeconomic indicators are
defined by the business, which additionally evaluates the entire assessment in the stated
electronic marketplace economy. Virgin Airlines is the company being analysed in this research;
it is a United Kingdom carrier that was created in 1984 in Crawlwy, England. The chosen airline
has 32 various locations around the world. This research will determine the most important
macroeconomic factors to investigate and how these effect corporate productivity. It also looks at
how large levels of expansion in the United Kingdom have affected the airline business, and also
current governmental intervention in the sector. Furthermore, because the company is engaging
with contemporary socio-political issues, it will provide suggestions according to the situation.
MAIN BODY
An summary of 2 macroeconomic components that the chosen firm must investigate, and also
the potential implications such factors could have on its business results
The accompanying factors that establish financial and operational circumstances that have an
effect on the regional and industries around the world of the Great Britain govern many factors in
an industry that have a wide range of advantages and therefore have to be examined and assessed
in a thorough way. Instead of a particular group of individuals or company, there are multiple
signs which show how the networking as a whole works (Arnold, Kiel and Voigt, 2016). As
shown beneath, a number of variables influence the industry's fundamental effectiveness:
 Inflation: It is characterized as an increase in the worth of a certain product or action that
is used by a household or group in a given place (Arnott, Lizama and Song, 2017).
Modifications in commodity pricing can be employed to determine this. Costs generally
increase throughout time; nevertheless, pricing could typically fall, which is considered
to be deflation. Inflation can occur when given cost rises as a result of rising production
costs, like raw material and personnel pay. It's a circumstance which arises when the

overall demand for products pushes up the price of a product in a certain sector. In the
example of Virgin Atlantic, analysts believe that price rises would play a big role in the
organization's growth (Boons and Lüdeke-Freund, 2013). With significant barriers to
commerce products which should be addressed. This really is attributable to increased
personnel expenses, which are having a short-term impact on the corporation's operations
and development. The expense of transportation on the Carriers will be borne by the
passengers. The CEO of a company which is boosting the volume of planes and using
more environmentally friendly fuel. It is estimated that the fuel will be 5 times more
expensive than regular fuel, which will have a substantial impact on the company's
revenue and administrative operations among its consumer base. This essentially leads to
analyses of a business company's expense to commute with effective regularity, which
appears to be the fuel that would be shared among all stakeholders in a certain sector
(Cavalcante, Kesting and Ulhøi, 2011).
 Unemployment: This term refers to it these who are unemployed and searching for
workforce, but are unable to find job in their preferred sector. It is among the most
prevalent situations in the globe in the present situation, since the epidemic impacted all
economic circumstances, causing unemployment to reach new highs in most industries.
These are persons who are struggling to obtain work for a number of reasons. In the
present situation, the pandemic is having a considerable impact on the UK's total
economy (Coman, Popica and Rezeanu, 2019). People are going to lose their
employment as a consequence of the significant impact of financial instability in a certain
sector, which is slowing the nation's overall macroeconomic progress. Virgin Atlantic, an
aircraft firm, is leading the trend in regards of authentic leisure aircraft transportation so
that it may help individuals and, in turn, generate job possibilities for others. They've also
trimmed 45 percent of their employees, resulting in a $530 million expense decrease
altogether. It has become progressively vital in the recent year to execute employee
adjustments that has culminated in big alterations in the given firm (Duan, Cao and
Edwards, 2020). Then they'd deal with the person's productive procedure in a proper
manner. It is commonly assumed that in a dynamic labour market, the cost of employing
additional employees will rise. In December, more than 4.5 million individuals are
anticipated to lose their employment, and the firm is highlighting the severity of the

problem. It's a word that refers to macroeconomic events which have an influence on
Virgin Atlantic Airways' entire process and operations. This would have the capacity to
increase the offered costs, as well as the entire manufacturing process, and the minimal
possibility of adding extra staff (Esteves, Piedade and Pereira, 2017).
What impact will the current UK rate of growth have had on the chosen business
It is commonly known that the UK does have a rising industry and that its citizens have high
functioning requirements which assure their long-term viability (Farahian and Parhamnia, 2021).
Due to worldwide medical constraints on the wellbeing service within the industry, which has
had a substantial impact on pandemic, leading in a decline of around 9.4% in the year 2020.
Virgin Atlantic Airlines is informed of a variety of techniques that have an impact on the firm's
and economy's rates of growth that are detailed below:
 Economic life cycle: It describes how the economy operates in four stages: expansion,
peak, contraction, and trough (Fathelrahman, 2019). Several variables, such as the
networking time difference, total employment, customer expenditure, and borrowing
costs, add to the economy reaching a superior phase. There appears to be a better
understanding of the individual and his or her views, which is advantageous to the
company and its stockholders. In the area of Virgin Atlantic Airlines, there appear to be
four basic stages of networking time difference, which are covered in the subsequent
subsections:
Expansion: This is the first phase of development, and the offered yield is minimal, resulting
in a driving element which leads to inflation tactics and cost hikes. Virgin Atlantic Airlines is
suffering inflation pressures as a consequence of elevated fuel prices and a growth in the
requirements of the chosen industry (Freudenreich, Lüdeke-Freund and Schaltegger, 2020).
Peak: A development pattern is approaching its maximal capacity, and this specific
sequencing has achieved its pinnacle, leading in structural instability which demand changes. It
is a particular aspect that allows a company to achieve its peak with higher earnings, but it may
also generate instability in the company's fundamental operating and tasks (Gielnik, Zacher and
Schmitt, 2017).
Contraction: When a company hits its peak, it goes through a phase of contraction, which
produces considerable slowing of growth, a rise in underemployment, and a price inflation. This

is the phase at which the complete cost is modified that is governed by Virgin Atlantic Airlines
and resulting in fewer errors (Gupta and Sharma, 2016).
Trough: This is when an industry is among the most unstable, and everybody is ramping up
to recover their total networking engagement. Virgin Atlantic Airlines is working on fixing the
operations by putting in place corrective measures (Madina, Zamora and Zabala, 2016).
 Inflation: At this phase of the procedure, inflation happens as a consequence of
enterprises' higher spending in an effort to produce rising prices within the trade and
business by increasing the provided prices of aircraft tickets. Everybody is impacted by
the evolution of the chosen area. Ticket booking costs have increased as a consequence of
the huge increase in supplied fuel rates (Mejri, MacVaugh and Tsagdis, 2018).
 Unemployment rate: This is the present situation of the industry, which is impacting the
entire industry. According to reports, unemployment in the Great Britain tends to climb
as a result of Covid-19's significant impact, which leads the firm's fundamental
functioning to be impacted at a quicker pace (Quinton and Wilson, 2016).
What effect will the government's current methods of engagement have had on the selected
organization
Individuals who are considered the principal competition in a particular business, like
administrations, as well as individuals with the power to affect financial and monetary policy. It
has an effect on the corporation's ongoing operations, aiding in the improvement of the monetary
system that could lead in a fall in overall worth and an increase in borrowing expenses as a
component of business profits and share prices. In the instance of Virgin Atlantic Airlines, the
foregoing are the several administrative components which have an impact on the company's
operational activities:
 Furlough method: While the entire country was afflicted by a global pandemic, the
trading market came to a halt (Soto-Acosta, Popa and Palacios-Marqués, 2016). The
airline industry is widely known for constructing a top-up scheme for employees in
attempt to offer them with prolonged vacation time, and a specific request has already
been submitted within the corporation. In the context of Virgin Atlantic Airlines, they
place a premium on structure, which assists businesses in ensuring efficient operations
and lowering a company's operational costs when in a pandemic. This is the technique for

ensuring effective operation, leading to greater productivity and revenue in the given
industry.
 Monetary technique: This is a tactic which adds to certain of the most ineffective
strategies, and the government is in control of a range of items in an efficient manner
such that they can have funds within their control and establish an image among the core
demographic. Virgin Atlantic Airlines, for example, is focusing on strengthening their
processes in order to ensure huge variations or diversification by modifying their
monetary approach. The company is focusing on solid acting for the specified particular
lending rate and also reliable management for the offered interest rates, thus all activities
can be arranged in the similar way (Toro-Jarrín, Ponce-Jaramillo and Güemes-Castorena,
2016).
 Fiscal strategy: Interest rates are viewed as a tool which helps to assessments of the
chosen company's level of inflation in this viewpoint. It's simply owing to inflation's
substantial macroeconomic consequences. This has to do with providing good service to
their potential buyer or potentially lose interests from the Banking System, which is
hesitant to raise lending costs. In the defined industrial facilities, there seems to be a rise.
A substantial sum of money has already been invested, which is now becoming
jeopardized, and also the government's ability to control the economy. There are assets
which lead to financial damage and a smooth transfer to the next level of management,
and also having a significant impact on the sector.
What are the recent global difficulties which the chosen company is facing, and how can that be
addressed right now
It is among the most important components in ensuring the company's operational
functions, but there are several concerns that Virgin Atlantic Airlines should solve in addition to
accomplish the work successfully (Ünal, Urbinati and Chiaroni, 2019). The justifications are as
follows:
 Rules, Policy, and Relationships at the Global Level: It is influenced primarily by the
company's diplomatic, decision-making, rules, and legislation, but it does have an impact
on the company's total transit and total operating within the system. Virgin Airlines, for
example, is suffering considerable losses in addition to assure good functioning and focus
on the corporation's right improvement.

 Efficiency of fuel: It is widely acknowledged that the cost of fuel is by far the most
significant macroeconomic element impacting the entire success of an airline company.
Because it is affected by the airline structure, this is the financial resource which leads the
corporation to slow down. As the structure of the airline firm increases, the enforced fuel
costs tend to increase, culminating in the establishment of a circle. In the instance of
Virgin Atlantic Airlines, the company is experiencing changes that will lead to a
reduction in overall functioning (Wang, Pauleen and Zhang, 2016).
Virgin Atlantic Airlines should focus on protecting practises in order to re-establish the
company and effect the entire airline industry within the company, it is proposed to the corporate
body. Whenever a company promotes financing, it may more effectively ensure that the
marketplace as a whole receives better products. As a consequence, they improve a variety of
professional prospects and can adequately confirm that people's living circumstances improve,
allowing for more amenities to be offered to users.
CONCLUSION
Economics study, as defined, is the study of the industry and company framework which
permits the free flow of goods in the trade. There seem to be various aspects which have an
impact on the corporation's general functioning. A variety of factors appear to have such an
impact on the sector as a whole. This includes issues such as unemployment and hyperinflation.
Furthermore, the economic life cycle is linked to a careful investigation of customer purchases
and quantity demanded across the industry. Monetary and fiscal strategies help to analyse the
movement of cash in a certain industry. Because there are so many businesses in the industry,
they are also enduring substantial changes as a consequence of rising fuel costs. Moreover, this is
suggested for the company in addition for company to have had an effective framework in
operation to ensure that supplies are transported to the intended market.

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