Micro and Macro Economics Analysis of British Airways Coursework

Micro and Macro Economics Analysis of British Airways - Coursework ExampleMicroeconomic Analysis Some of the demand and supply agentive roles that confine affected the profitability of British Airways as a association over the years include economic conditions, competition from other im officelines, set up and fall in global oil prices, changes in government policy, and employees expenses. Economic conditions include one all important(predicate) demand and supply factor that affects the profitability of British Airways. For example, in the first few years of the juvenile millennium, global recession has hit hard the companys profitability. Generally, global recession means that the realitys economy is shrinking. A bad economy means that many people will not have a lot of money in their accounts to tour the world and in the process, affecting the companys demand. This in the long run affects the lettuce of the company. Competition from other airlines is also a factor that aff ects the British Airways profitability. In the new millennium, the emergence of many low-cost airlines has really affected the companys profitability by reducing the demand. ... When global oil prices rise, the cost of jet fuel, which is a by-product of the fine oil, will also rise. This will lead to a significant rise in the price of air tickets and in the long run, reducing the demand as well as the companys profits tremendously. The vice-versa happens when the global oil prices fall. Recently, when oil prices rose, knowing that this would affect the companys profits tremendously, BA executives took part in an illegal act of fixing fuel surcharges. This led to the fining of BA and the executives charged with a sinful act (Thompson and Martin, 2010, p.298) Government policy also affects the companys profitability. When the government issues travel advisories to some destinations in the world due to terrorist attacks, the number of travelers to those destinations goes down and in the process reduces the companys profits that would have been made in travels to those destinations. For example, the terrorist attacks on the World trade center had the government informing people of how the home on the ground was and in the process, the number of travelers reduced tremendously bringing down the companys profits. Employees expense is another factor that affects British Airways profitability. It forms a big part of the companys cost which are later passed down to the travelers and which affects demand. For example, in 2002 when the British Airways was restructuring its business operations, it had to have 13,000 job cuts. This job cuts were an set out by the company to cut its costs by 650 million pounds. This showed how employee expenses as a factor has a big impact on the companys profitability (Young, 2007, p.42) The market structure in which the elect company operates in is a