Airline Industry Losses At an international conference, in which 95 of the world's airlines were represented, it was said that the global airline industry would have a $6 billion loss for the year 2005 Only parts of the industry were said to be profitable Although there had been a growth in travel and revenue in Asia and Europe, increased costs in North America and high fuel prices were estimated to outweigh that It was stated that losses from 2001 to 2004 had already exceeded $36 billion Globally, non fuel costs were forecast to fall by 4 5 in 2005 This was particularly the case in Asia where labour costs were low European airlines were recording profits due to increased traffic and some industry mergers However, the biggest obstacle to growth in the industry was North America, where airline recorded large losses In North America, labour costs and airport taxes were high In addition, competition from the similar low costs airlines charging cheap fares was causing a fall in the profits of the larger companies The airline industry also criticized the high taxes, averaging 26 , which are imposed on ticket sales in North America For the improvement, the industry launched some major projects to cut costs, which included the complete replacement of paper tickets with electronic tickets a Calculated the estimated average yearly loss between 2001 and 2005 Show your working (02 x Marks) b Identify four causes of the airline industry losses in North America (02 x Marks) c Discuss whether fuel and labour would be classified as a fixed or variable cost for the airline industry (02 x Marks) d A company is making losses Discuss what policies the company may adopt to become profitable Show your working supported by relevant graphs (04 x Marks) e After the spread of COVID 19, the airline industry is suffering huge losses far more than the above Do you think the government supports the airline industry via bailout packages or leave the industry alone Discuss in the light of welfare economics (05 x Marks)

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Airline Industry Losses At an international conference, in which 95  of the world's airlines were represented, it was said that the global airline industry would have a $6 billion loss for the year 2005  Only parts of the industry were said to be profitable  Although there had been a growth in travel and revenue in Asia and Europe, increased costs in North America and high fuel prices were estimated to outweigh that  It was stated that losses from 2001 to 2004 had already exceeded $36 billion  Globally, non fuel costs were forecast to fall by 4 5  in 2005  This was particularly the case in Asia where labour costs were low  European airlines were recording profits due to increased traffic and some industry mergers  However, the biggest obstacle to growth in the industry was North America, where airline recorded large losses  In North America, labour costs and airport taxes were high  In addition, competition from the similar low costs airlines charging cheap fares was causing a fall in the profits of the larger companies  The airline industry also criticized the high taxes, averaging 26 , which are imposed on ticket sales in North America  For the improvement, the industry launched some major projects to cut costs, which included the complete replacement of paper tickets with electronic tickets  a Calculated the estimated average yearly loss between 2001 and 2005  Show your working  (02 x Marks) b Identify four causes of the airline industry losses in North America  (02 x Marks) c Discuss whether fuel and labour would be classified as a fixed or variable cost for the airline industry  (02 x Marks) d A company is making losses  Discuss what policies the company may adopt to become profitable  Show your working supported by relevant graphs (04 x Marks) e After the spread of COVID 19, the airline industry is suffering huge losses far more than the above  Do you think the government supports the airline industry via bailout packages or leave the industry alone  Discuss in the light of welfare economics  (05 x Marks)

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Airline Industry Losses At an international conference, in which 95% of the world's airlines were represented, it was said that the global airline industry would

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