The objective of this and the other written assignments in the course is to show how the managerial economic theory and tools presented in your textbook are applied to a current airline industry problem. Airbus and Boeing publish annual forecasts for the global growth of air transportation and the market for commercial aircraft over the next twenty years. Fortunately, both make their forecasts available to the public.
The objective of this assignment is to demonstrate how Airbus and Boeing employ the theory of supply and demand in the development of their forecasts.
The Airbus Global Market Forecast (GMF) and the Boeing Current Market Outlook (CMO) are available on the Airbus and Boeing websites. The location of the forecasts varies from year to year but each can be accessed by a search within the website or from the sitemap.
In your review of the forecasts, concentrate on the factors (“shifters” or independent variables) that Airbus and Boeing employ to estimate the supply and demand for global air travel (Note this is supply and demand for passenger and cargo transportation, not for Airbus and Boeing aircraft). Compile an extensive, though not exhaustive, list of the most important factors categorized by supply or demand. Suggestion: Before reading the GMF and CMO, you may wish to make a list of the supply and demand shifters from your textbook. Then, as you read, list the specific factors affecting the supply and demand for air transportation under the appropriate shifter. You should find one or more factors for each shifter.
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