Business cycle study for the us airline industry

Abstract

To basic objective behind the study is to understand the relationship between the business cycle of the Airline industry and the economic fluctuations, by looking into the cycle generating components of the industry and understand their interactions. This report delves into what factors in the economy affect airline profitability and explores the possibility of predicting the performance of the airline industry by closely studying the general economy or vice-versa. The motivation to pursue this particular topic is to gain knowledge of the airline business cycle variations and identify variables that can aid the industry to identify patterns, which in turn would enable them to chalk out cyclical management strategies. The study would help us in understanding the typical nature of an airline business cycle right from its commencement to end and how it affects the industry at each stage. Besides this, a proper understanding of such key trends could have important implications in the financial management of the airline industry given its high operating leverage and the difficult times thus helping reduce the vulnerability to the macroeconomic fluctuations.