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Passengers in Air, Supply and Demand Analysis

In: Business and Management

Submitted By xanetka
Words 1789
Pages 8
MODULE TITLE: Microeconomics, Introductory
PROGRAMME: BA in BE

TITLE OF ESSAY: Passengers in air, supply and demand analysis

Air transportation is very valued type of transport by people, especially because it is time-saving, when you are travelling to countries, which are long-distance from each other, and mostly, it is the only way to get an access to geographically isolated areas. Moreover, air transportation enables the access to people, capital, markets, and resources. As, a result, the availability of air transportation services effectively increases in most of the countries. It has also an effect on economic activity. Different factors dominate the relationship between economic and air transportation. Because of these unique factors, the nature of air transportation flows differs among the economics. In this paper, I would like to analyze what are the main factors of demand and supply that have an impact on air transportation market in Eurozone area.

Like any other business, the airline industry is impacted by changes in its external environment. Prices have a strong impact on demand of airline industry. As I can observe on the graph, the inflation for traveling by airplanes is falling down, while the prices of tickets are rising up, and when the prices of tickets are going down, the inflation is again starting to increase. There are several factors that have influence on price dynamics; political, legal, economical, social, and technological. Knowledge of the trends and the economic life cycle can help predict external opportunities, as well as predict risk factors of investing in the industry.

Political and legal factors that impact the airline industry Most industries are very sensitive to changes in the legal factors. The airline industry function in political environment that is very regulated and controlled by government. Issues...

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