Commercial Passenger Airline Service Industry Research Paper

Commercial Passenger Airline Service Industry - Research Paper Example Most of the small aircrafts offer exclusively business classes thereby carrying only a few people who are willing to pay a higher charge for the high quality services (Cento 11). Apparently, the demand and supply of the airline services is dependent on a number of factors. Some of these factors are positive attributes which boost the industry to become more competitive as opposed to other modes of travel. The negative factors affect the profitability index of the airlines as they record low revenue from reduced. FACTORS AFFECTING DEMAND OF AIRLINE SERVICES The airline industry goes through turbulent times while in other seasons, the business sprouts. This is due to a number of factors that affects the demand for the services of the airline industry. Some of these factors are controlled by the industry while others are not easily controlled by the industry (Shaw 34). For example, some natural factors that affect the demand for the services of the airline industry are not easily contro lled by the airline industry. Therefore, it is in the best interests of the airline industry to make sure these factors are not adversely affecting the demand for the services. The first factor that affects the airline industry is political stability. The politics in different places of the world are dependent on the political environment. Politics is an aspect that affects virtually every service and production industry (Fojt 22). This is due to the political orderliness that comes when the political environment is stable. When the political environment is stable, there is perfect supply and demand for services and products in the market. This is the same approach that is used in the airline industry. Many people would like to travel when the political environment is calm. For example, when there is political tension in a particular country, many people fear for their lives. As such they are not likely to travel to such places. This will affect the airline industry as it will strug gle with a low demand for its services (Ben-Yosef 23). Apparently, many people are not likely to travel when there is political instability in a country. In some instances, many people would prefer to postpone their vacations when there is political instability in an area. This will have direct and dire effects on the airline industry since there will be a low demand for the services and products of the airline companies (Cento 7). However, when there is political stability in most places where the industry operates, there are many people that feel the urge to travel. This will ultimately increase the demand for the services of the airline industry. Security is one factor that affects the demand for many services and products in the world. Security is an ultimate factor that affects their demand and supply for services. For example, when there is insecurity in an area, the demand and supply of services and products will be halted. In some instances, there is a curfew due to security reasons. As such, business operations are limited to the stated times. This is the same scenario that happens in the case of demand for airline services. Many people prefer secure places when they are traveling. As such, they will only consider traveling when there is steadfast security. Though airline industry tries to limit cases of insecurity, some instances are not controllable. For example, when there were terror attacks in September 11th, many people felt that the security

How accounting affect stock price Essay Example | Topics and Well Written Essays - 500 words

How accounting affect stock price - Essay Example Unexpected good accounting performance has a significant effect on CEO’s pay for a short time. However, on long-term basis, the trend reverses, and the pay starts decreasing and thus the benefits accrued evens out. However, in the compensation using the stock price performance, a good stock price translates into increased CEO salary, which on the long-run maintains the rise. Accounting performance is arrived at by an aggregate evaluation of all the subunits of the firm. Acquiring all the required information in computing the aggregate departmental performance is a tedious exercise that takes quite a considerable amount of time. A poor performance in one department is likely to negatively affect the other entire firm. Thus, to ensure a high performance level, the CEO must focus on an increasing performance of all the departments of the firm. Accounting performance is very useful when issuing promotions to various departmental managers and supervisors. The best performing managers and supervisors, and the ones who have maintained an upward trend are awarded with promotions, but not the best method to use in determining a CEO’s compensation. A firm could register an upward growth for a number of years, but assume an upward diminishing growth. This phenomenon occurs when the firm achieves its maximum growth, where all resources are utilized to the optimum. At this point, the firm cannot grow anymore since all its resources are fully utilized. The growth thus becomes stagnant. A CEO who is compensated using this method will start receiving decreasing remuneration as the firm’s performance starts decreasing. In contrary to the accounting performance, the stock prices method does not reach a maximum growth level. A CEO who works hard to achieve growth of the firms’ stock prices has no limit to the level at which they can