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.
British Airways faced recession in 2009/2010 where business faced a decline. This was bad for British Airways as it caused majority of problems however the problems were faced appropriately by the business. Although there was a large revenue decline, the business ensured to make quick and permanent changes to reduce the cost base. Recession is measured as to when there is a negative economic growth three months, and then six months in a row makes it two negative quarters of negative economic growth. http://www.britishairways.com/cms/global/microsites/ba_reports0910/overview/cfo2.html [Accessed: 16th February 2014].
The whole airline industry were running in to negative profits and many major airline corporations were operating under the bankruptcy protection except Southwest airlines and JetBlue airlines which was through its efficient management strategies and its emphasis on low fares . This was due to the terrorist attack on September 11, 2001. The customers feared to use air transportation and thus the domestic yields dropped almost 20% and stayed low until 2005. JetBlue saw its worst nightmares in the year of 2007 after more than 1100 JetBlue flights were cancelled in February which was then followed by sharp rises in fuel costs thus raising the operational costs .David Barger who was the president and COO of JetBlue was promoted as a CEO in 2007. The board was concerned about the situation and David Barger who was the President and COO of JetBlue during that time was appointed the new CEO of the company at its corporate headquarters in Forest Hills, New York.
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 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.
[224][225] North American air space was closed for several days after the attacks and air travel decreased upon its reopening, leading to a nearly 20% cutback in air travel capacity, and exacerbating financial problems in the struggling U.S. airline industry. [226] The September 11 attacks also led indirectly to the U.S. wars in Afghanistan and Iraq,[227] as well as additional homeland security spending, totaling at least $5
These days are considered the most tragic days in the American economy. These days began the “New Era” or a time of low unemployment when general prosperity masked vast disparities in income. John Maynard Keynes said” The extraordinary speculation on Wall Street in past months has driven up the rate of interest to an unprecedented level” Bierman Jr. 1). “There is a warrant for hoping that the deflation of the exaggerated balloon of American stock valves will be for the good of the world” (Bierman 1). It started as the Dow Jones stock dropped twenty three percent on Tuesday October 29th; this resulted in a loss of $8-9 billion
The share prices were lower, which caused the crash of the stock market. The collapse of the stock market was thought to be the main cause of the great depression, but many economists do not think so. Great Depression very quickly was spread all over the world. The Great Depression was a period of high rates unemployment, bankrupting banks, lowering prices, and increasing the uncertainty to American nation. Moreover, it brought big changes in U.S politic, society and culture.
When the stock market crashed, it immediately affected the economy in the matter of a few hours. At this time President Herbert Hoover was in office, and he was overwhelmed with the tragic situation. During his Presidency, he did his best to fix the economy. However, things did not begin to get better until Franklin D. Roosevelt took office in 1932. Roosevelt immediately began reconstruction on the American economy.