Economic Challenges Facing Airports in an Era of Global Financial Instability
Article Review: Economic Challenges Facing Airports in an Era of Global Financial Instability
Instructions:
Question : Describe and discuss the main critical financial issues and challenges associated with air transportation?
Select an appropriate peer-reviewed article on a topic from this week’s readings. Begin this assignment by reading the news article carefully. Take care to note the following in your close reading of the article:
1. Does the article appear to be making a clear point, expecting the reader to draw a particular conclusion? If so, what is that thesis or main conclusion?
2. Does the author appear to have a particular point of view or approach to the topic? Does this seem to be persuasion or does the author seem to be making a relatively objective effort to answer reasonable questions readers may have about the topic?
3. What are the key issues or topics that make up the article? What conclusions does the author draw concerning each?
4. What sorts of evidence and reasoning does the author use to support each of his/her main conclusions? Note specifically, all facts the author cites in the article. Can you determine if they are accurate?
5. What kind of general impression(s) would you expect the typical reader to take away from the article after reading it?
The article review should be submitted in APA format with an APA cover page, APA header with page number and an APA formatted references sheet. The article review should be at least 1000 words not counting cover and references. Please include 3-5 academic sources. Although you are reviewing one article, you will need support (sources) for your claims of accuracy of the facts (what are other authors saying about the same topic).
Solution
Article Review: Economic Challenges Facing Airports in an Era of Global Financial Instability
Economic Challenges Facing Airports in an Era of Global Financial Instability
Summary
This article looks at the economic challenges which faced airports and the airline industry particularly during and after the 2008 global financial crisis. According to this article, the global economic recession which was experienced in 2008 resulted in a financial instability that negatively affected air transport as well as other economic sectors (Viswakarma, 2009). For instance, it is indicated in the article that the 2008 financial crisis resulted in the bankruptcy of many commercial banks and this had a direct effect on air transport. Following the recession, the author reveals that the airline companies cut down on their operations to reduce the level of spending but this not save them from making huge losses.
There are a number of economic challenges which have been highlighted in this article that affected air transport. They include recession, demand, fuel, and revenues. According to the article, the 2008 financial recession affected all industries including the airline industry. This resulted in huge losses for the airline companies. The article also reveals that the passenger demand following the economic recession fell considerably. The reduced demand meant that airline companies could not meet their capacities in terms of the number of passengers and amount of cargo (Viswakarma, 2009). This resulted in losses. With regard to fuel, it is revealed that between 2008 and 2009, there was a considerable reduction in the cost of fuel and this helped reduce the financial challenges faced in air transport. On revenues, the author reveals that there was a general reduction in the revenues generated by airline companies following the economic recession and this resulted in losses.
Article Review
This article provides a clear analysis of how the 2008 financial economic recession affected the air transport. The article highlights each challenge clearly explaining how it impacted financially on the airline transport. The author does not only provide an explaining about how each factor affected the airline companies but also provides statistical proof to back up his claim (Wensveen, 2016). For instance, on the issue of demand, the author indicates that the passenger demand fell by 16.7 percent during the recession while the cargo demand fell by 23.2 percent. This thereby makes the author’s assertions to be factual rather than unsubstantiated claims. With regard to the conclusion, the author concluded that the economic recession had a negative effect on the air transport. However, he did not paint a grim picture with regard to the ability of the airline companies to negotiate through the challenge. For instance, the author asserted that the airline industry would be able to go through the recession successfully and continue being profitable. He pointed to a number of actions being taken by airline companies at the time in a bit to adapt to the negative effects of the recession. One of the actions is the application of the lean principles (Yu, 2012). The author pointed out that airline companies began applying lean principles in their operations and this would help them recover. However, he warned that the success of the industry to negotiate the economic crisis was dependent on the ability and willingness of airline companies to change with the situation. He recommended that airline companies have to put in place strategies that would ensure their survival in the market. Some of the recommendations that the author provided include controlling operational costs, reducing charges for airline to increase demand, and optimization of resources.
In this article, the author does not hold a particular point of view or does not try to make a particular point with the view of influencing the reader to think in a particular. Instead the author provides an objective analysis of the situation of air transport after the 2008 economic recession. To ensure the objectivity of his assertions, the author provided statistical proof to back his claims (Wensveen, 2016). The reader was thereby left to make their own conclusion with regard to subject under discussion. The only part of the article that the author provides a personal perspective is in the conclusion. However, even in this the author tries to maintain objectivity. For example, he exuded optimism with respect to the ability of airline companies to negotiate through the crisis because of the steps the companies were taking in reaction. The article is thereby not persuasive but rather informative. The author just attempts to answer the questions that readers could have had on the topic.
The main issue or topic that makes the article is the economic challenges that the airline industry following the financial instability which was caused by the 2008 economic recession. The conclusion that the author makes about the issue is that air transport was negatively affected. However, at the time, the author predicted that the airline companies had the ability to go through the challenges faced successfully provided they changed the way they operated (Viswakarma, 2009). The accuracy of this prediction can be seen from the current performance of the airline industry. True to his prediction, the airline companies managed to negotiate through the rough financial period and unlike the financial industry which experienced massive closure and bailout, few airline companies looked for government bailout but through effective strategies, they managed to steady themselves and continue being profitable.
The main evidence that the author provides to support his conclusions is the statistical evidence. In each point that the author presented, he provided statistics on financial performance of the airline industry before and during the recession (Yu, 2012). The author also provided predictions on the future performance of the industry. Some of the statistical predictions provided by the author were obtained from experts. To ensure objectivity and universality of his conclusions, the author provided statistical from the airline industry in various locations such as the US, India, the Middle East, and Africa. The general impression that the reader gets on reading this article is that the author is objective and unbiased (Viswakarma, 2009). This impression is reinforced by the evidence provided the author to support his assertions. The objectivity impression that the author creates on the reader is also due to his deliberate effort to avoid providing personal opinion on the subject but rather present facts about the issue.
Conclusion
Basically, this article looks at the
economic challenges that were experienced in air transport during the 2008
economic recession. According to the article, the challenges which were
experienced include reduced revenue and reduced passenger and cargo demand.
This resulted in huge losses for airline companies. The article is unbiased and
objective. The author provides statistical proof to back his claims and avoids
giving personal opinions. In conclusion, the author reiterated the negative
effects of the financial crisis on air transport but exuded optimism with
regard to the ability of airline companies to manage through the situation.
References
Viswakarma, A. (2009). Economic Challenges Facing Airports in an Era of Global Financial Instability. Retrieved from http://www.aci-asiapac.aero/upload/service/13/self/55cb0714e6df2.pdf
Wensveen, J. G. (2016). Air transportation: A management perspective. London: Routledge. Yu, G. (2012). Operations research in the airline industry. New York: Springer Science & Business Media