Aviation Management Page |1

Aviation Management at Emirates Airlines

[Name of Writer]
[Name of Institution]
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Aviation Management at Emirates Airlines

Introduction
The study intends to review important aspects in of Management in Aviation by taking
Emirates Airline as selected firm. The discussion improves knowledge on assessing
macroeconomic concepts that have been identified influencing the hypothetical economy.

Background
Emirates have become one of the largest amongst organisation in the UAE; they are
engaged in the leisure industries, tourism, aviation and travel. Across 50 business sector, 50,000
employees are working with Emirates Group. In Arabian Gulf and the world, the group owns
biggest companies. They are leading since they own mastered in travel and tourism. Also Data
has worked by Emirates Airline.

Discussion (Task)
LO1: Computing GDP using distinct methods

LO2: Role of money in the economy and balance of payments and exchange rates
Role of Money
There are various functions perform by money, it service for economic development as a
standard value which is measured. It works as a store value that acts for deferred payments as a
standard. An important function of money is to distinguish the value of goods as the medium of
exchange. It is used to buy goods and services that contribute the development of monetary
economy (Guru, 2016, p.1).
Balance of payments
It determines in various markets, by referring to equilibrium in product market
depending on the supply and demand for goods. The market price decided when supply equalled
demand in the macroeconomics markets (Redpath, O'Connell, & Warnock-Smith, 2016, pp.4-5).
This balance is determined by the rate of interest and supply of labour market and loanable
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funds. The balance of payments determines by using basic analysis by determining inflation
(prices) and GDP (output).
Exchange Rate
In relation to price of one currency, exchange rate is determined. By the demand and
supply of the currencies in exchange rate markets it relate with the price of two currencies. These
can be used for determining domestic price and currency that varies from one another (Ibarra, &
Blecker, 2015, pp.1-2).

LO3: Economic Growth theory and its connection to inflation and unemployment
Many arguments have been proposed on reaching the responsiveness of growth to
inflation. Theories of economic growth analyse it’s the harmful effect of growth. The economic
growth theory is useful because it helps in accounting observed aspects, so inflation possesses
relation to economic growth theory as it built by persistent inflation. Mainly the bouts of
inflation are followed by economic growth by showing upward or downward trend. Therefore,
inflation with economic growth theory stays particular to it if constraints or issues arise. This
theory contributes in accounting a positive relation amongst the growth and inflation. On the
other hand, as at some point, there would be periods of the negative or low output of growth or
inflation rates, there may be the increase in the rate of unemployment. Evidently, a curve relation
appears at that time. Relation of economic growth theory help in assessing unemployment issues
as this concept gained prominence in understanding stagflation. Unemployment rises with
increase prices in some period due to which economies experience unemployment massively.
Therefore, the relation of growth theory with unemployment or inflation could understand by
review of Monetarist, Neo-classical, Neokeynesian, Endogenous growth or Classical growth
theories. It is because these theories contribute to making correlation with inflation-growth
respectively. It is considered as a recall for economies, which are because of its emphasis on
needs for saving, investor incentives to grow as it links with labour, land or capital. It provides a
model to link inflation with quantity theories that contribute to determining inflation or monetary
growth to assess its impact on capital accumulation (Aurangzeb, 2012, pp. 45-46).
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Outcome 4: Describe international trade policies.

In 2011, Ozrurk provided a recent review of volatility and misalignment that has
examined. A Recent review of these policies provides relation response on prices for exchanging
rate movements particularly in short run period (Frenkel, & Johnson, 2013, p.31). Trade policies
held that there is no such impact on economic variables or international trade in the long run,
which is because of no particular market distortions or relative prices that return on the level of
equilibrium. Many distortions could be hindered the relative prices and their adjustment, which
has been analysed by theoretical propositions in practices. These policies aim to allow trading
globally (Suranovic, 2016, p.1). They facilitate both developed and developing countries by
conduct in close collaboration with other countries. It may conduct regionally or bilaterally and
remain committed to multilateral negotiations (Yelwa, David, & Awe, E.O, 2015, pp.104-105).

Outcome 5: Role of the banking sector in the economy

Banking sector plays a significant role in the economic development. It refers to capital
trade of goods by increasing existing stock within the economy. This sector helps in promoting
the formation of capital by improving productive use of resources. Its role for increasing benefits
for countries include some major facilities that increase ease in accounting trade and business
with other countries, these benefits are clear with its contributions which are as follows:
• Savings mobilisation and funds availability
• Self-sufficiency attainment to effort for economic growth
• Modern technology implication
• Agriculture sector and industrial sector development
• Market expansion and development in research
• Budget deficits assessment and foreign trade
• Valuable services with use of resources and modern techniques
• Balance of payment surplus and optimise resource utility
• Enhance distribution and creation of money
Banking industry or sector majorly effort to develop economic growth, it is the main component
in assessing financial constraints as they are the departmental stores for the state. There is a very
dominated and typical position of the banking sector in present day economic condition.
Therefore, without banking sector, economic growth development is likely to be impossible.
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Task 1
Q1.Define GDP and two factors which inflate the GDP.
The monetary value of goods and service is measured by GDP (Gross domestic product),
which is produced in the state in some period and bought by the final consumer. It is composed
of service or good which is product and distributes in market and involves production by
nonmarket like education or defence service provided by the State regime (Mehmood, 2012,
pp.11-12). Two factors mainly inflate the GDP; one of them is the Nominal GDP that is
measured by real costs, which are unadjusted for expansion. One the other hand, there is Real
GDP that measures yield inconsistent dollars. Therefore, they help in evaluating economic output
annually which precisely compare with the past year. Since costs change from year to year, GDP
may change from year to year regardless of any changes in the Real GDP. Consequently, there
must be some changes in GDP as it reflects back to the adjustment in costs. Rising costs expand
GDP while falling costs flatten GDP. In this manner, to get genuine GDP, the operation must be
turned around. Since costs typically rise, GDP is emptied by the measure of the expansion to
touch base at genuine GDP. Consequently, it is frequently called the GDP deflator.

Q2.Which is a reliable measure of economic growth Real or Nominal GDP. Why.

Real GDP is considerably more reliable for measuring the economic growth rather than
Nominal GDP because it offers a far better view than Nominal while accounting the economic
output at some period. Nominal is the GDP that does not possess effect of inflation, and this
cannot be evaluated easily. Therefore, it is more reliable by being good indicator to determine
economic growth.
Q3.Calculate GDP using both income and expenditure method

Income approach
S.No Rewards Amount
1. Corporate profits ($1220)
2. Personal savings ($480) depreciation
3. Net interest ($1348)
4. Compensation of emp. ($10592)
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5. Rental income ($876)

6. Sale of second hand goods ($1200) depreciation
7. Contribution to FICA ($1576)
8. Properties income ($1312)
9. Intermediate goods ($700) depreciation

The GDP could be 19304 but after eliminating depreciated amount it = 16924

S.No Items Amount

1. Gross profit domestic investment $2864
2. Personal taxes $2260
3. Govt. Speeding $3696
4. Import $2188
5. Net exports $480 depreciation
6. Personal consumption exp. $11864
7. Indirect taxes $1480
8. Transfer payment and other income $1934 depreciation
9. Statistical error $800 depreciation

Total depreciation 1916 so the GDP will be 16262

Q4: Explaining what determines GDP in long or short run, also GDP equilibrium in both short
and long run.
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GDP, in the Long run, is determined by the quantities of factors production and
technology which is available to institution and behaviour in labour market. It determines the
labour force by fraction employed. GDP in the short run is determined by the interaction of
aggregate demand (C, I, G, NX) with aggregate supply. Further, the GDP equilibrium also
depends on these two factors (Aggregate supply and aggregate demand). Wages and other few
prices do not respond to be changed in the economic situation in the short run period. For
maintaining this equilibrium, in some markets, there would be no quick adjustment in prices. It
creates period of surplus or shortage with sticky prices which are slow to sustain equilibrium
level. GDP equilibrium level is sustained without the stickiness of price for achieving potential
results and natural employment level. Conversely, the long run in an analysis of macroeconomic
is a period in which wages and costs are adaptable, during the long run the level of employment
may will to the Real GDP and natural level to potential (Nicita A, 2013, p.2).

Q.5 Case Analysis (Unemployment case study Harlow)

1. Inflation and Unemployment
Inflation is the rise which is sustained in the price level of service or goods. On the other
hand, unemployment is the rate or percentage of labour force that are unemployed. These are
some major issues for depressions or economic recessions. These problems may lead the
economy towards social disintegration; increase financial issues and loss of sustain economic
conditions. Consequently, it may be a fall of economy in poverty with impact of social unrest.

2. Briefing unemployment and three types of unemployment

Unemployment occurs when an individual who is effectively finding for employment and unable
to have work. Unemployment is regularly utilised as a measure of economic development. The
most often issue of unemployment is the unemployment rate, which is the quantity of
unemployed individuals divided in the labour force by the quantity of individuals. Following are
types of unemployment:
• Unemployment that occurs when an individual first starts to look for jobs or between
jobs, it is known as frictional unemployment.
• When there is any mismatch amongst skills that workers have and skills demanded by
employers, it is known as structural unemployment.
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• With the decrease that aggregate expenditure from the recession in the economy, at
that time businesses lead to cut their production, and this is known as cyclical unemployment
(Blvd, Suite, Davis, p.1).

3. Problems facing by Mr. Kevin and Mr. Peter.

This case refers to a problem of unemployment facing by Mr Peter and Mr.Kevin which is
heart-rending news posted in the Guardian. The story features the plight as it focused on
highlighting this particular issue of unemployment. It frames the job prospects based on the sign
of recovery for those over 50 and out of work or any employment. The studies of official data
showed that in the three months 21,000 more over the 50s had joined the long-term
unemployment. Further, for than 12 months 143,000 individuals in that age group have faced out
of work situation. They have lost their jobs and have been unemployed for many times. This
situation is common disturbingly despite remembering that recession in the economy has not
been for every time. It indicates that these employers against older people are facing issues due
to discrimination and ageism. Such states of mind, as we were probably aware that they are
profound situated and practically difficult to enact against. What required are a more noteworthy
consciousness towards these issues and some useful proposals based on how these problems may
be progressed (Anonymous, 2012, p.1). In any case, they can be interesting. Maybe something
comparable highlighting contextual investigations where genuine unemployed more established
individuals come up against genuine bosses while being coached by a genuine HR expert would
be useful in exhibiting the truth to managers and employment seekers alike and what both sides
may do to assess unemployment.

4. Explaining the term Natural Rate of Unemployment

The rate of unemployment when there is equilibrium in the labour market, it is known as
natural rate of unemployment. It is considered as the difference between those who are willing
and able to have the job and those who would like the job at their current wage rate. It involves
structural unemployment and frictional unemployment. It the rate of unemployment that occurs
by factors that are supply side despite the demand side factors. An argument shows that it occurs
when there is Phillips curve in long run across the X axis.
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Q6. Analytical calculation:

1. Part 1: Calculating the Cost of basket and CPI for 2007.

=(50)(0.90)+(100)(0.50)+(200)(200)+(100)(5)+(300)(1.75)=1520
CPI for 2007 while considering it as a base year
=current period price of basket*100
Base period price of basket
=1520/1520*100= 100
2. Part 2: Calculating the Cost of basket and CPI for 2008 if 2007 is the base year
Cost of Basket 2008
=(50)(0.75)+(100)(0.95)+(200)(2.50)+(100)(4.80)+(300)(2.00)= $1712.5
1712.5/1520*100= $112.67
3. inflation/deflation between 2007-2008 calculation
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CPI –CPI BASE/CPI BASE*100

112.67-100/100*100=$12.67 (Inflation increased in 2008 as compared to 2007)

Q7. Analytical calculation

a. Real and Nominal GDP for all the three years calculation
Real GDP
For 2006
RGDP= Q * P
(180*100) HATS + (150*104) BALLS = (100*60) BATS =$39600
For 2007
(200*100)= (200*104) +(100*60 =$46800
For 2008
RGDP= Q * P
(200*100)+(240*104)+(130*60)= $52760
Nominal GDP is always equals to Real GDP
For 2006
(180*100)+(150*104)+(100*60)= $39600
For 2007
(200*120)+(200*4)+(100*50)= $29800
For 2008
(200*130)+(240*4.5)+(130*50)= $33580
b. Calculate the growth rate in Real GDP between 2006-2008
2006-2007
46800-39600/39600*100=18.18% (change and growth between 2006-2007)
2007-2008
52760-46800/46800*100=$12.73
c. Calculate GDP deflator for all the three years.
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For 2006
NGDP/RGDP*100
39600/39700*100=100
For 2007
NGDP/RGDP*100
29800/46800*100=$63.67
For 2008
NGDP/RGDP=100
33580/52760*100=$63.64

Conclusion
In conclusion, the study has enlightened important macroeconomic aspects which are
necessary to sustain a better business approach. This will help in improving knowledge on
elements that are required to have the consistent development of the company. It includes the
analysis of a specific case to review needs of making substantial policies to sustain effective
economic growth. Moreover, it shows the importance of having adequate knowledge on skills to
manage an Aviation based company who’s working globally; it will help management to apply
better economic models in the context of the airline industry.
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