Airline Industry The airline industry is extremely influenced by elasticity of demand, externalities, wage inequality, monetary and fiscal policies. The elasticity of demand is influenced solely by current market conditions and the reason for the consumer's trip. The tragedy of September 11th had very damaging effects on the airline industry. It has impacted fiscal and monetary policies, supply and demand, and created many employment problems around the world. The airline industry is perceived as unpredictable because it relies on the current market and the market is constantly changing. Over the years, incidents such as inflation, oil prices and terrorist attacks have seriously affected the demand for airline tickets. Competition from other airlines constantly affects the price of airline tickets because it allows the customer to choose from other airlines. The alternatives are to travel by train, by car, or to avoid travel when possible, and consumers have resorted to all of these substitutes during periods of instability in our economy. The elasticity of demand is strongly influenced by the purpose of the customer's journey. Airline customers usually fly for business or pleasure. Airlines use a method that combines revenue and inventory costs to set ticket prices. While it is essential for this industry to focus on profitability, the main goal is to increase the cost of revenue from flights. A huge factor that increases the cost of tickets is when the customer orders tickets close to the departure date, when people wait to purchase tickets, the airline industry sees this as a risk. And since they have to make up for unsold seats, buying your...... middle of paper...... business.Quotes· The Baltimore Sun. (2008). Demand for the Aviation Fuel Log Supply System - Economy, Business and Finance, Volusia County, September 11, 2001 Attacks - baltimoresun.com from http://www.baltimoresun.com/business/bal-bz .jetfuel11aug11,0,4909483 .history· Enberg, D (2005, September 15). Why do airlines fail?. Retrieved May 17, 2008, from http://www.slate.com/id/2126383/ · Zabin, C. (1999, December). Retrieved May 18, 2008, from Living Wages at the Port of Oakland: http://www.iir.berkeley.edu/livingwage/pdf/portoak.pdf· (2001). Transportation Safety Commissions. Retrieved May 18, 2008, from the Transportation Security Administration website: http://www.tsa.gov/research/fees/passenger_fee.shtm· FRBSF. (2002, January 18). Economic letter. Retrieved May 18, 2008, from FRBSF: http://www.frbsf.org/publications/economics/letter/2002/el2002-01.pdf