Airline Predictions for the Airline Term Paper

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This comes after a period of lowering the interest rates to curtail the post-2001 recession that was particularly detrimental to the economic performance of the airline industry. The rate of interest affects consumer's disposable income, and as consumers find it more expensive to borrow money, they are less likely to have disposable income to expend upon leisure-based trips, thus meaning discount rather than full-price fares further cut into industry profits.

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The price of air travel, as noted by the U.S. Board of Transportation, has continued to decline for consumers, while the price of fuel and other inputs into the transportation industry has increased for the industry, meaning that the Federal Reserve actions, if interest rates continue to increase, will not help the airline industry.

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