Economics of Airline and Airport Management

Economics of Airline and Airport Management

2008

Economics of Airline and Airport Management

Introduction

The continuity of business becomes a major concern when a company experiences a downturn due to the fierce competition , natural disaster and industrial events including ones caused by terrorism . In early 21st century , when there was a terrorist attack on the famous building in the world , World Trade Center and Pentagon , we witness that such attack has cost the country 's economy in major reform both operational and fundamental aspects not to mention severe impact on

the air travel industry

The 9 /11 attacks have significant impact on the continuity of air traveling . This is because such attacks will decrease travelers ' trusts to going by airplanes . When it happens , Boeing and Airbus , as the leading manufacturers of airplanes , faced declining demands for new airplanes from airlines

The above incidences are some examples of economic and industrial issues that influence the airline industry . Concerning the airline industry this will discuss several issues that influence it

Aims and Objectives

This intends to demonstrate an understanding of economic , social political , international , environmental and technological influences concerning the air travel industry by using a PEST analysis

Using the non-participant observation method , collecting data and analyzing qualitative information from journal , books , magazine and other online materials , this aims at analyzing pricing strategies and cost strategies in the air travel (airline ) industry

In addition , the aims at identifying economic constraints within which the international air industry operates

Delta Air Lines ' Share Price

In special report regarding the merger between Delta Air Lines and Northwest Airlines , USA Today reports that both companies ' stocks experienced negative sentiment from the market as their stocks fell respectively

Figure 1 Delta 's Stock Price

Source : Yahoo , 2008

According to a report concerning the merger , immediately after the company announced the merger , Northwest shares plummeted about 8 .4 , or equals to 94 cents , to 10 .28 . Similarly , Delta 's stock price also declined about 12 .6 equals to 1 .32 a share , to 9 .16 . This condition becomes a signal of investors ' denial since at the same time , the Dow Jones industrial experienced a rise about 60 points . The condition represents the drop in the value of Delta 's stock in exchange for Northwest share from previously 3 .1 billion into about 2 .7 billion (Reed and Adams 2008

Figure 1 shows the historical trends of Delta 's stock price within 1-year period . In addition Figure 2 represent current stock price of Delta 's Air Lines , exhibiting the continuous declining stock performance to 6 .80 (Reed and Adams 2008

Figure 2 Delta Airline Stock Info as of 22 April 2008

Source http /phx .corporate-ir .net /phoenix .zhtml ?c 71481

irol-stockQuote

U .S . Airline Industry Competition and Impact of Credit Crunch

At present , although it is still early in the recovery and certainly high fuel prices and another terrorist attack and political events like wars could cause another setback air travel industry in the...