Prepare a paper analyzing the current market conditions of the Airline industry including a supply and demand analysis that answers these questions:
1) Is supply increasing or decreasing and why?
2) Is demand increasing or decreasing and why?
3) Price trends (cost of productions)
Include references and citations.
Please find the file attached.
Airline industry worldwide is in trouble due to the recessionary trend in the market, hiking oil prices and threat of terrorist attack. All these have lead to rise in labor costs, decrease in passenger traffic and reduction in revenue /mile flown. The price war in the industry has also worsened the situation. Aviation companies to combat this have resorted to cost cutting and layoff measures (Airline Industry, 2008).
In any industry, supply and demands are two aspects to determine the profit and losses (Mishra & Puri, 2007). Excess demand or supply has adverse affects on either of the two parties involved in the transaction. When any service is excessively demanded, it results into an initial rise in the prices ...
The response addresses the queries posted in 487 words with references.