The Australian Domestic Airline Industry: Contribution To GDP And Employment Essay.

The History of Aviation Industry in Australia

The Australian Domestic Airline Industry is one of the most advanced industries globally that can conduct its operations with maximum effectiveness and productivity. The airline industry operations in Australia begin in the year 1920 with the help of the Australian aircraft and Engineering Company (Ng, Hanaoka and Oum 2022). The aviation industry of Australia generates the employment of around 65000 people across the country, which helps contribute to the nation's GDP. The domestic airline industry for sale includes various domains in which it operates, such as air freight transport and commercial aviation in the country and across international borders. It also provides adequate infrastructure for conducting the operations of Aviation in a country that uses a high level of technology. Moreover the aviation industry of Australia provides training to the employees in the aviation training centers built accordingly to provide high-level training to the Employees. Other operations in the aviation industry of Australia include Air Traffic Control (ATC) and cargo services that are provided all over the country and in other parts of the world (Ozturk 2022). This report will provide a basic understanding of the aviation industry of Australia and the contribution of this industry to the GDP of the country. For understanding the aviation industry of Australia and its impact on the country's annual GDP, some significant scenarios are also taken into consideration. A brief explanation is provided in all the scenarios mentioned in the discussion concerning Australia's aviation industry. The report also describes some significant decisions taken in the evasion industry of Australia for increasing its share in the annual GDP of the country. It also analyses the activity conducted in the aviation industry of Australia and its major contributors to the annual GDP of the country. It will discuss the different economic scenarios such as an increase in the unemployment rate, an increase in the inflation rate and a decrease in the corporate tax by the government of Australia. The impact of economist scenarios will be analysed in the report concerning the domestic airline industry of Australia. Moreover, the relationship between the domestic airline industry of Australia with the government is analysed in the report.

The aviation industry of Australia makes a major contribution to the annual GDP of the country by conducting various operations all around the world. The aviation industry of Australia provides services in various forms, such as generating employment for the people, creating an effective supply chain and promoting travel and tourism across the country (Hanson et al. 2022). All the services provided by Australia's aviation industry help contribute to the GDP annually. It also confirms a smooth flow of airline services across the country to avoid any destruction in the process. The domestic airline industry of Australia contributes an amount of 69 billion dollars to the country's GDP, resulting in 5.5% of the GDP (Maung, Douglas and Tan 2022). Moreover, this industry can create around 7 lakh jobs for the air and transport sector people. The major share of jobs generated by the domestic airline industry of Australia is in the sector of tourism, which is around 3 lakh 20000 jobs for the people (Muller, Walls and Wittmer 2022). The tourism sector in the airline industry of Australia contributes an amount of 30 billion dollars to the GDP of the country annually. The airline industry of Australia also creates business for other industries, such as the hospitality and tourism industries. Moreover, the tourists that avail the services of the domestic airline industry of Australia also avail of the services of other businesses such as hotels, shops, food and many others. The Australian airline industry also attracts Foreign Direct Investment (FDI) from other countries to improve operations. Moreover, the data suggests that every year the foreign tourists that avail the services of the airline industry of Australia spend a total amount of $41 billion in the country's economy (Gil, Kim and Zanarone 2022). This expenditure adds up to the country's GDP and generates business for the citizens of Australia. Macroeconomics is a concept that explains the activities conducted in an economy as a whole instead of the study of individuals in the markets. The contribution of the domestic airline industry of Australia to the GDP of the country is more easily understandable through the macroeconomic theory of capital and investment decisions (Heiets et al. 2022). This theory explains the adequate and effective allocation of funds and resources to increase the business's profit. This theory demonstrates how the maximum utilisation of resources is conducted by acquiring other businesses or by investing in the assets that have a good return on investment. To increase the profits of the airline industry of Australia, the top management utilises the resources of the industry in the most effective manner (Zieba and Johansson 2022). For example, the research and development department of the airline industry of Australia consistently introduces the most advanced technology to attract customers and generate more revenue from the operations. This method helps contribute to the GDP in a large proportion end improves the economy. The domestic airline industry of Australia can also contribute to the GDP of the economy by providing is of travel to the passengers at the minimum cost possible. Moreover, the operations conducted by the Australian domestic airline industry create competitiveness in the market as it provides high-quality services at a low cost to the customers. The domestic airline industry in Australia is the major source of connectivity to all the country's regional towns that the citizens frequently use (Chang et al. 2022). The activities conducted in the airline industry of Australia also helps to create jobs directly and indirectly in the country that helps to increase the income of the people and contribute a major proportion to the country's GDP. It also helps increase the country's employment rate and reduces unemployment among the people to improve the condition of the economy in Australia. For example, the jobs are created for handling the traffic at the airports because the data suggests that approximately 15 million passengers travel through regional airports in Australia every year (Abdi, Li and Camara 2022). According to the reports published by the Australian airport association, the regional airports in Australia alone employs approximately 4500 people in the country. This data is before the COVID-19 pandemic because the number of jobs in the aviation sector reduced due to the loss of tourism and travel industry after the pandemic (Horobet et al. 2022). Australia's domestic airline industry also provides training to the high skilled labour for improving their operations across the country and increasing their share of Australia's GDP. For this purpose, this industry conducts training programmes in the different parts of the country for the personal development and growth of the employee. The domestic airline industry of Australia also supports two other industries in the economy that helps increase the GDP share in the economy Australia. For example, the airline industry of Australia provides logistics services for exporting and importing goods that are manufactured in Australia and other parts of the world. Through this activity, the airline industry of Australia supports the commerce and business industry of the country (Ozturk 2022). It can also generate employment for the citizens of Australia in other industries by providing training and adequate equipment hello for successfully completing the business's operations. The domestic airline industry of Australia also supports the country's tourism industry by conducting the operations of travelling worldwide. According to the recent data, approximately 97% of the total international tourist visit Australia and avail the services of the domestic airline of the country (Competition and Consumer Commission 2022). The contribution made by the international tour in Australia is around $12 billion, which directly contributes to the GDP of the economy (Ozturk 2022). Another economic theory that is most suitable in the domestic airline industry of Australia is economies of scale. It is a concept in economics that demonstrates this situation where expanding the business operations in other parts of the region helps lower the production cost of the goods and services offered in the market. For example, the airline industry of Australia is expanding its business in the rural and remote areas of Australia, helping it reduce the cost of the services offered to the customers in the market (Abdi, Li and Camara 2022). The expansion of the business in the economy also creates competition and gives opportunity to other businesses to grow and contribute to the GDP of the economy. In this condition, there is also benefit to the consumers of that economy as they can avail of the production services at a lower cost due to an increase in the competition in the industry.

Contribution of Aviation Industry to GDP of Australia

The government of Australia provides monetary and fiscal support to the country's airline industry for the smooth functioning of its operations. Moreover, during the crisis of the COVID-19 pandemic, the airline industry of Australia received full support from the government to avoid and reduce losses in the business (Martin and Martin 2022). It has been observed that since the year 1990, the airline industry of Australia has witnessed major structural reforms in the industry that the government of Australia implemented. The government of Australia time to time frames policies and procedures to support the airline industry and to expand its business operations in different parts of the country (Kaya and Aydin 2022). For example, the government is providing support for building up airports and particular infrastructure in Australia's rural and remote areas. This method will increase the revenue of Australia's airline industry and help increase the share in the GDP of the economy. The economist of Australia consistently evaluates the performance of the airline industry to improve the operations and increase its share in the GDP of the economy (Gil, Kim and Zanarone 2022). The government is also focusing on improving the infrastructure of the airline industry in Australia by working on the research and development department and introducing the most advanced technological equipment for increasing the effectiveness of the operations. Moreover, the government also focuses on the country's airline industry employees to avoid any exploitation in the sector. For example, in the crisis of Covid-19 pandemic, the government of Australia is providing support to the airline industry by encouraging other industries to contribute to the development of this sector's infrastructure (Kurnaz 2022). Moreover, the government is inviting ground handling companies to manage the different operations in the airline industries such as managing arrivals, cleaning and maintaining the aircraft, conducting ground engineering activities, and managing the catering services. It will help reduce the cost of the services provided by Australia's airline industry and reduce the monetary loss that occurred due to the COVID-19 pandemic. Moreover, for retaining the domestic airline industry in Australia, the government is trying to ease the border restriction rules to increase the industry's operations. The government is also introducing a domestic aviation network support system that can track and evaluate the operations of the airline industry in the most effective manner (Thukral 2022). This network helps reduce accidents in the airline industry and ensures the safety of the passengers availing of the services. The airline industry of Australia is also planning with the government to reduce the air services fees by around 50% to increase the revenue of the industry and reduce the burden of price on the consumers of the country (Horobet et al. 2022). Recently it has been observed that the government of Australia has also introduced an Australian airline financial relief package that is used to recover the losses that occurred in the airline industry of Australia. Under this package, the monetary relief is given to the industry, and some of the significant charges are waived off from the companies in the airline industry of Australia (Abdi, Li and Camara 2022). The government is also planning to improve the managerial operations of the airports in the country to handle the traffic easily and by upgrading the infrastructure of the airports. For example, the Sydney airport located in Australia witnesses heavy traffic of passengers every year, due to which the government is planning to expand the area of the airport. It will help recover the losses of the airline industry and contribute more to the GDP of the economy of Australia. It is observed that the government's relationship with the airline industry of Australia is improving and maintains a healthy environment in the economy of the country (Bussier and Chong 2022). The airline industry accepts the rules and norms that are implemented by the government of Australia without any conflicts. Moreover, the recommendations made by the airline industry of Australia are also taken into consideration by the government for improving the infrastructure and operations all over the country. The government is also planning to improve the freight capacity of aircraft in the domestic airline industry of Australia. It will help to handle the luggage of the passengers more effectively and with extreme care. The upgrade in the infrastructure of the freight capacity will also help reduce the time in conducting the activities at the airports. It is also introducing some major policies and procedures that focus on improving the global supply chains in the airline industry (Yusaf et al. 2022). The disruption in the global supply chains affected the airline industry of Australia, due to which the government is giving support to the sector. For this purpose, the government is setting up an international freight assistance mechanism that focuses on the movement of the production services while conducting the operations of the domestic airline industry in Australia.

The Impact of Economist Scenarios on Domestic Airline Industry of Australia

Here are some scenarios that occurred in Australia's economy and the impact of these conditions on the domestic airline industry.

The condition in the Australian economy, where the inflation rate is raised by 6%, will increase the fuel prices of the aircraft, which will directly impact the increase in the cost of services offered to the consumers. Moreover, the increase in the inflation rate also reduces the purchasing power of the people in the economy, enabling them to spend less on the products and services offered in the market. The rise in the inflation rate by 6% forces the airline industry of Australia to cancel the flights and change the route of the aircraft due to the increase in the price of fuel and other services in the industry (Guo, Zhang and Cross 2022). It will increase the overall cost of these services in the industry, and all the burden is beard by the government and the consumers of the economy of Australia. The rise in the inflation rate by 6% also affects the industry's business cycle and the country's unemployment. According to economics, there is an inverse relationship between the economy's inflation rate and the country's unemployment rate (Sohal and Vass 2022). The inflation rate increased by 6%, that is affecting the airline industry and reducing the job opportunities for the people in the country.

The Australian government decreases the corporate tax rate to 20%

The corporate tax that is framed by the government and collected but the industry is all over the country helps develop the infrastructure of different industries in the economy of Australia. Corporate tax is the amount required to pay to the government of Australia by all the industries as a share of the profit that they're earning in the country's economy (Liu et al. 2022). In the condition where the Australian government is reducing the corporate tax by 20%, it favours the airline industry of Australia. This condition will help generate more profit from the airline industry's operations and decrease the overall cost of providing services to the consumers in the country. The reduction in the corporate tax also helps the airline industry reduce the losses by conducting its operations in the country (Asen 2020). The government reduces 20% the corporate tax, which also helps the Australian airline industry expand its operations in other parts of the world.

The situation where the unemployment rate increases in the economy of Australia affects various industries and creates a barrier to conducting operations all over the country. The increase in the unemployment rate affects the airline industry in Australia. It makes it difficult to handle the operations of the airline industry, such as airport security, staff for the maintenance and cleaning of the aircraft and handling the air traffic (Haque and Haque 2022). All the activities conducted in the airline industry of Australia require a high skilled workforce to complete the process successfully. The airline companies also face a reduction in the productivity of the work conducted for the passengers due to the increase in the unemployment rate by 10% in the economy of Australia. For example, during the crisis of the COVID-19 pandemic all over the world, the airline industry of Australia faced difficulties due to the increase in the unemployment rate. In the condition of an increase in the unemployment rate in the economy of Australia, the airline industry increases the cost of services offered to the consumers in the market (Botha and Nguyen 2022). As productivity is reduced due to the increased unemployment rate in the industry, the burden of cost is transferred to the consumers by the airline industry companies in Australia. 

Relationship between Domestic Airline Industry of Australia and Government

Conclusion

From the above discussion about the Australian domestic airline industry, it is concluded that various internal and external factors influence the decision-making of the players in the organisation. It is discussed the contribution of the airline industry of Australia to the GDP of the economy. The domestic airline industry in Australia contributes 5% to the GDP of the economy of Australia. Moreover, it can generate around 7 Lac jobs for the people in the airline sector worldwide. It is also observed that the Australian domestic airline industry maintains a healthy relationship with the government of Australia. The government implements various kinds of policies and procedures to support the airline industry. The government also helps the airline industry improve its infrastructure and introduce the most advanced technology for conducting its operations. It is also observed that the strategies implemented by the airline industry of Australia in the time of crisis, such as the COVID-19 pandemic. There are also some significant economic scenarios, such as inflation rate, unemployment rate and corporate taxation by the government on the airline industry of Australia. These economic scenarios provide a brief understanding of the impact of these conditions on Australia's domestic airline industry and the country's economy. The discussion has observed that the Australian domestic airline industry also supports other industries in the economy to operate and generate more revenue from conducting the operations. The contribution made by the Australian airline industry to the economy of the country shows that it is developing its infrastructure consistently and expanding its operations in other parts of the world. Moreover, with adequate support from the government, it can open up airports and adequate infrastructure in the remote and rural areas of the country. It is helping the domestic airline industry of Australia contribute more to the country's economy and increase its profit share from conducting the operations with increased productivity. It is also being observed that the airline industry is also facing various kinds of challenges in conducting its operations that are creating a barrier to the growth and development of the industry. The issues occur such as COVID-19 pandemic, an increase in the unemployment rate and disruption in the global supply chain. All the factors involved in slowing down the growth of the airline industry of Australia are analysed and being tackled by the government and private players in the industry by the government and private players in the industry.  

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