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Impact of Global Financial Crisis on Air Transport

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Final Project Part One: Impact of Global Financial Crisis on Air Transport in the U.S
Embry-Riddle Aeronautical University
MBAA 522 – Business Research Methods
For: Dr. Barry Bauer
March 15, 2015
Introduction This research paper examines the origins of the 2008/2009 world financial crisis and the impact that the crisis had on air transport in the United States of America. Although the crisis originated in the economies of North America and Europe, its effects were global with particular serious implications for economies of the developing countries including my country, Zambia. The maximum blame of the crisis is pointed at the money lenders who created such problems as it is believed that it was the lenders in the developed nations who lent funds to people with poor credit and a high risk of default. Therefore, in an effort to address the crisis, the American Federal Reserve flooded the markets with increasing capital liquidity in order not only to lower interest rates but to also broadly depress risk premiums as investors sought riskier opportunities to bolster their investment returns (Craig, 2013). As we all know that aviation is one of the most important pillars of the global economy as it provides millions of jobs globally and contributes heavily in the global gross domestic products of a number of countries. To this effect, the aviation sector which is one of the fastest growing industries had to face negative growth rate while some aviation companies were forced to close due to huge losses that they suffered due to the global financial crisis. According to several economists, the crisis of 2008 was the most severe economic contraction, though less than the Great Depression (Craig, 2009). Therefore, in this paper, we will analyze the passenger traffic data for all American and foreign carriers that operated in America before, during and after

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