The Airline Industry Impacts on Economy

Essay by moniraeUniversity, Master'sA+, October 2008

download word file, 7 pages 3.0

The airline industry has had many affects from the economy. This paper will explain how the economy has affected the airline industry by explaining the shifts and price elasticity of the supply and demand; as well as provide information about the positive and negative externalities. The monetary and fiscal policies have had several different impacts on this industry and this paper will explain that along with the wage inequalities occurring throughout this industry. The first part and most important part of this paper is the positive and negative externalities, following that is the monetary and fiscal policies, then you will find the information key to this paper: the shifts and rice elasticity of supply and demand, and the inequalities to which have occurred. Also included in this paper are some extra impacts to which have occurred due to the economic changes which you may find very informative. The conclusion at the end of the paper will review everything read and give my opinion on the impacts which have occurred due to the economic changes and many other situations which may affect the economy.

EXTERNALITIES:The airline industry fluctuates in price due to many positive and negative externalities. "Events such as, "The September 11th Tragedy" affected the airline industry very negatively. The airline industry depends on the transactions from buyers due to high overhead costs. Work and labor weigh heavily on profits, and determine the lifespan of many airlines. The airline industry can be viewed as a natural monopoly, but there is clear evidence that states otherwise. While it is difficult to classify, it depends on the circumstances, which will be discussed further into this analysis," stated InnovatedThinker (2007) p2.

The airline industry is highly affected by the externalities. Some externalities that are exclusive to the airline industry are crashes and some...