Custom essays on Airline Industry

In this paper I am going to define and address the impact of Real GDP. It is also necessary to discuss how recent trends in GDP have affected the airline industry.
In the beginning of my paper I would like to define two main terms of this project and it will help us to be more effective in our discussion. First of all it is necessary to mention that gross domestic product or it is also called GDP (total value of goods and services generated within the country for a certain period of time) is a fundamental and comprehensive macroeconomic indicator. The United States Department of Commerce, Bureau of Economic Analysis monthly published GDP data, providing information in terms of both nominal and real (inflation-adjusted) prices. Report of the GDP is calculated by quarter, and first published at the end of each quarter for the next month, after which the initial assessment has been twice reviewed at the end of the month. Thus, basing on above presented information we should say that according to Cypher and Dietz (2004), “Real GDP is the value of production using a given base year prices, here presented at constant market prices measured in millions of US Dollars.” Cypher and Dietz (2004) also added that “Real GDP is gross domestic product in constant dollars. In other words, real GDP is a nation’s total output of goods and services, adjusted for price changes. Real GDP can be compared to nominal GDP, which is GDP in current dollars, i.e., the nation’s output in actual dollars in a given year.” A direct method for calculating real GDP implies summation over the groups of commodities produced in the base year prices.
Thinking about Real GDP and taking into account official data stated by Bureau of Economic Analysis (2010) we should pay specific attention on the fact that “Real GDP – the output of goods and services produced by labor and property located in the United States – increased at an annual rate of 1.7 percent in the second quarter of 2010, (that is, from the first quarter to the second quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.7 percent.” Analytics forecasted similar results and that is why it was not a surprise for them that the Real GDP increased only in 3,7 percent in the first quarter.
In this part of the paper it is necessary to define the meaning of airline industry and it will be good to consider it an “intensely competitive market.” Nowadays air travel is a large and really growing industry with big future and perspectives of development. Airline industry assists not only economic growth, but it also greatly impacts on world trade, tourism and international investment. Describing market structure of the airline industry and basing on facts presented in the Airline Marketing Research we see that “today, the global airline industry consists of over 2000 airlines operating more than 23,000 aircraft, providing service to over 3700 airports. In 2006, the world’s airlines flew almost 28 million scheduled flight departures and carried over 2 billion passengers. The growth of world air travel has averaged approximately 5% per year over the past 30 years, with substantial yearly variations due both to changing economic conditions and differences in economic growth in different regions of the world.” Originally, the airline industry was almost wholly government owned, but in the USA the situation has another character and all airlines that considered major in the country are private.
Analyzing situation with Real GDP and its impact on the airline industry we see that recent trends in GDP have affected the airline industry in different way, both in negative and positive at the same time. Remembering the last big disasters, such as the September 11, 2002 terrorist bombing, and problems with the escalating prices of fuel we see that the airline industry was in a financial crisis, but nowadays situation changes and new perspectives of development are waiting for their implementation.
Taking everything into consideration, I would like to admit that I discussed the above-stated theme, defined all necessary terms and observed contemporary situation in the airline industry.