Question

Are any changes taking place in the macroenvironment that might have an impact, positive or negative, on the Airline industry? If so, what are these changes, and how might they affect the industry? (Forces outside the industry)

Answer 1

There are changes taking place in the macro-environment that affects the Airline industry. The first change is in the economic environment of the country, due to the higher unemployment and lowering of the purchasing power of people. In April, 2020, the unemployment rate rose to 14.7% in the USA and it came down to just over 11% in June 2020. It makes a demand for the flight tickets to reduce, hampering the overall market size of the airline industry. Further, people are either searching for the cheap flights, or alternative channels of transpiration, making flights to be in operations at losses. So, a negative impact is created upon the Airlines industry. The second change is the partial lockdown in the country with the enforcement of law & order to prevent spread of COVID-19 pandemic in the USA. It has caused grounding of the many planes that were operational before the COVID-19 pandemic. It is a negative impact and airline industry has suffered. The third change is the closure of many other industries whose employees were using airline services. Now, this type of corporate demand is decreased heavily. So, the derived demand is vanished, causing the airline industry to suffer again. It is also a negative impact.

Though there is a government stimulus package to help people, but it is only for the sustenance of households to maintain and fulfill the demand of essential goods and services. It cannot help, create demand for the airline services. so, it is unable to make a strong and positive impact upon the airline industry.