The smaller, more efficient aircraft is the trademark of Embraer’s success. In 2009 when the global ecnomic crisis hit sales fell by a substantial amount. Executive jets are normal goods so the overall decrease in consumer income along with fewer buyers led to a sharp decrease in demand. Another factor that causes demand to shift left is the tastes and preferences of the buyer. During rough financial periods people tend to look down on Executive Jets as unnecessary and overkill.
FIRM ANALYSIS The Airline Industry is currently in a recovery since 2008. At that time the industry went through a financial crisis. This was brought on by a sharp passenger decline and rising costs of oil. The industry had to reshape how they do business. Today the industry still seems grim.
Mission Systems and Training, Current Issues Impacting Financial Statements: The Boeing Company is facing trouble with its new 787 Dream liner. The company’s share price has dropped by 4.6% in last week and another incident of Japan Airlines who faced issue with plan’s fuel pump has put the firm in trouble again. It could impact company’s strong brand image and long term inverse impact on financial statements. Well, company has decided to develop the newer version of Dream linear by early 2014 to come out from this situation. Lockheed Martin Company is expecting reduction in net revenues in the year 2013 by nearly $825 million due to sequestration measures taken by the United States Government.
The first major reason was the nature of the airline industry. It was found that nearly half of leisure travelers and more than a quarter of business travelers did not have a preferences when it came to airlines. There were only two real concern of the passengers: first, the price and second, the frequent service (lots of time-of-day choices). There was also major consolidation in the airline industry in the early nineties due to extremely high fuel costs. Many firms filed for bankruptcy or were acquired by other firms.
In the aviation industry key components have changed over the past decade. With uncertainty in the airline industry with deregulation, privatization, and skyrocketing fuel prices - successful planning of a winning strategy has never been more needed in the aviation industry. With the airline industry in disarray deregulation only added frustrations and negative impacts of aviation. Finances in the airline industry have struggled greatly in the past ten years due to the economic crisis that started in 2008. There are many incidents which were currently affecting the aviation industry which are wage inequality, and monetary, fiscal, and federal policies all having a current impact.
(Isadore) The announcement came at a tumultuous period of time for the aviation industry. During the past year ATA, Aloha, and Frontier had all filed for bankruptcy protection. (Isadore) Airlines were facing difficulty with continually rising fuel prices. Air fares had increased 6% in the last year, but fuel prices were up over 55%. (Isadore) Furthermore the recession had seriously reduced both vacation and business travel.
The credit crisis has revealed glaring gaps in the risk management processes of even the biggest players in the financials sector. After the demise of Lehman Brothers and the near-collapse of AIG in September 2008, credit markets became dysfunctional and capital flows that had already slowed ground to a halt. As global banks continued to reduce leverage, the impact of the crisis began to engulf households and businesses around the world. By the end of 2008, most advanced economies were simultaneously in recession for the first time since World War II, reducing growth prospects in emerging markets due to lower demand for export goods. As a consequence, global growth is expected to remain below potential in 2009 and 2010.
There was a combination of domestic and worldwide conditions that led to the Great Depression. Many have believed that the crash of the stock market on October 29th, is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to recover some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression.
Known also as Black Tuesday, October 29th left stockholders shattered with recorded losses reaching $40 billion dollars (Kelly, n.d.). Many banks and financial institutions began collapsing which led to irretrievable, uninsured deposits and savings. Fearing further loss, people began spending less which led to a decrease in production and an increase in unemployment. As companies began to fail, the government devised the Smoot-Hawley Tariff in order to protect American businesses. The Tariff placed high taxes on imports leading to a decline in international trade.
However, the SPH program put a lot of pressure on store managers and sales. In 2010, a large group of the R&R associates sued it for “working off the clock”. This lawsuit might cause reputation damage, and the settlement is up to $200 million. In 2008-2009 before the case, there was an economic recession. The whole luxury goods industry in the U.S. dropped over 14%, and R&R revenues declined 10%.