Question

what are the key economic factors affecting the airline line industry? provide a reference.

Answer 1

Airline transport industries play an important role in the contribution of the economy of a country. This industry has the power to increase the National Income of a country, employment opportunities, and also increase the revenue from the tax. From the beginning of the 1980s, the aviation industries grow worldwide. The increased demand in the aviation industry results in the number of airline companies. As the number of airline industries increases the competition in this field also increased. As demand increases, they are affected by some key factors in the economy today. They are:

• Income per capita

Income per capita has a positive impact on the economy of a country. As we said earlier aviation industries contribute to increasing the income per capita of a country. This also helps to increase GDP.

• Price of tickets

The price of tickets has a negative impact on the economy of the aviation industries. As the number of airlines increases the competition in the field also increases. So for the existence in the field, many airline companies need to lower the price of tickets which mostly affected them negatively.

• Inflation

Inflation also has a negative impact on aviation. The factors directly affect the demand for business passengers, will indirectly affect the leisure of travellers demand by increasing their capacity of persona income.

• Exchange Rate

The demand for the airline will affect if there is a difference between arrivals and departures to the international markets.

• Demographic Factors

If a country with a high population is weak in terms of economic performance the demand for airline will also affects.

One of the famous airline, Air India faced the problem of income distribution among their staffs. This is because of the present competition in the airline market. As a result this company forced to give concession to passengers in ticket price which push them into a big debt.

It is clear from the above factors that aviation industries is depend on many factors for the economic growth.