News Report: the Market of Airlines
Table of Contents
Assumptions
Limitations
Conclusions
References
Any piece of news and those dedicated to the social, political, and economic sectors, in particular, have some assumptions and limitations which should be considered during the further application of these materials. It is important to review these assumptions and limitations before using the piece of information. After some time, the situation can change, and the piece of news will be outdated.
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Assumptions
The article Fare cuts to jack up airlines’ losses by Chowdhury first appeared on January 1, 2009 (2013). It was dedicated to the issue of income losses the Indian carriers faced because of increased aviation turbine fuel (ATF). Nevertheless, after ATF prices reduced, the losses of Indian carriers shortened to a minimum. The article also mentioned that a report presented by brokerage house CLSA about Jet Airways stated that “the fall in ATF [fuel] prices has brought down the load factors (flight occupancy) required for the airline to break even from 78 percent to 63 percent” (Chowdhury, 2013, para. 3). An article that appeared two days later reported that full-service carrier Kingfisher Airlines reduced basic prices by more than 50 percent (Reporter, 2013). It caused a chain reaction among the rivals of the company, which also had to cut their fares. Such actions became possible due to the reduction in ATF prices.
If there is a necessity to use a piece of news similar to the one discussed above for a report or other work, some assumptions are evident; first of all, it can be stated that high ATF prices negatively influence the functioning of aviation companies. Long periods of high prices cause significant losses of income. An opposite assumption that is directly related to the first one is that in case the ATF prices fall, the revenues of the companies increase. Moreover, it often leads to cuts in flight fares, and thus it can be assumed that the decrease in ATF prices stimulates changes in load factors of the carriers. For example, the experts stated that “the airfare cuts have raised the breakeven load factors back to 70 percent” (Chowdhury, 2013, para. 3).
Limitations
Although news articles provide some assumptions for their application, they also have limitations. Limitations are the factors that do not allow generalizing the obtained information due to some reasons. Thus, one of the limitations of the news articles similar to Fare cuts to jack up airlines’ losses, or Kingfisher cuts basic Fare, impact on ticket 20% is that they are meant for the period they were issued. It is true for different spheres, but the date for which the article was valid is particularly crucial for economics which is constantly changing. Consequently, the assumptions figured out from these articles cannot be suitable for use in contemporary conditions. Secondly, the articles, if they are general overviews, describe situations in particular countries or cities. As a result, the assumptions have limited use and are not applicable to other locations. For example, the articles discussed in the paper presented the situation on the market of Indian airlines, and American airlines could have other reactions to the change in ATF prices.
Conclusions
On the whole, diverse media make a good source of information. However, different pieces of information, news, in particular, have a limited period of validity. Thus, in case it is necessary to use the news as a source of information, it is better to select recent publications to avoid misunderstanding and misinterpretation of information.
References
Chowdhury, A. (2013). Fare cuts to jack up airlines’ losses. Business Standard. Web.
Reporter, B.S. (2013). Kingfisher cuts basic Fare, impact on ticket 20%. Business Standard. Web.
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