Episode 010 | Airline Industry | Business English podcast
|The airline industry is notorious for being a risky bet for investors. The strong labor unions keep the wages up, and the intense competition amongst carriers can lead to price wars. Terrorism and global economic slowdowns are demand side factors which are difficult to predict and out of the airline’s control. The high price of jet fuel is also another nightmare for airlines. In tough times, it’s not at all uncommon for major airlines to have to file for chapter 11 and seek a government bail out.
Key vocabulary and phrases that are discussed in the podcast:
Notorious: Known for something unfavorable. He is a notorious murderer. She’s notorious for being late for everything.
Labor unions: An organization who fights for workers rights, salaries, and benefits. If the labor union and the company don’t reach an agreement, the workers will go on strike starting Monday. (Going on strike means to stop working because you don’t agree with something. You will start to work again once the agreement has been reached).
Carriers: This is just another name for an airline company.
Price wars: This is when companies compete with each other about price. One company makes a price, then the other company makes a lower price, then the first company makes a lower price again. This keeps happening and the prices go lower and lower. Its really hard for companies to make a profit if this happens.
Terrorism: The use of violence and threats to scare or cause harm, especially for political purposes. The September 11 2001 airplane attacks on the twin towers in New York City is an example of terrorism.
Demand side factors: These are factors that affect the demand for a product. Terrorism causes the demand for airplane travel to go down because many people are afraid to fly. The aging population in the Western world will cause the demand for healthcare to increase because older people need medical treatment more often than younger people.
Chapter 11: This is a particular type of bankruptcy in the USA. Major companies in certain situations often file for chapter 11.
Bail out: A financial rescue. A company or a person has no money and someone else has to give them money to help them. My dad got really angry when I spent way too much money on my credit card and he had to bail me out. The government is often forced to bail out big companies that are crucial to the economy.