two short article reviews

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1 Why Indian airlines are heading into financial turbulence Aug 31st 2018 India Economy Indian Airlines are facing a tumultuous time as cited by an article which reviewed the operations of the Indian Aviation industry. Jet Airways, India’s second-largest airline reported a loss of $189m for the second quarter of this year. Another airline, Spice Jet, which is the fourth largest, recorded a $5m loss also in the second quarter. IndiGo, the largest carrier in India, recorded a 97% decrease in its profits over the same period. The factors contributing to the decline in profits of Indian airlines are many. The major culprit responsible for the high running costs are the exorbitant fuel prices which have ever been on the rise for the better part of this year. Indian Airlines would have countered this rise in fuel prices by increasing ticket prices but Indian travellers are sensitive to high prices hence an increase would negatively affect business. Additionally, the Indian government has one of the highest levies on aviation-fuels. Increasing fares would most likely make Indian travellers prefer other means of transport over air. The other problem is that the Indian aviation industry is flooded with many players. Most major Asian airlines have set up routes in India, meaning that some routes are bound to have more seats than passengers can fill. Aviation is one of the most competitive and sensitive industries. Since it is dependent on energy to run, fuel prices play a central role in its success hence changes in fuel prices often lead to massive changes in cash-flow. The industry is also widely unregulated; most countries do not restrict other international players from flooding the market, a factor that often disadvantages local players. In the case of Indian airlines, players from other Asian countries are taking up a percentage of passengers that the local airlines are in so much need of.
2 Why Australia loses prime ministers Sep 4th 2018 Australia Politics Australian politics is one of the fields that is ever changing; especially when it concerns the post of the Prime Minister. It is a system that has been brutal to the six successive Prime Ministers who have shared the same office in a span of 11 years. The high turnover indicates that no one Prime Minister has held office for more than one term which is set at three years. One of the reasons for the high turnover is the way election laws are stipulate. The constitution stipulates that for a candidate to clinch the position, they require a mere 50% of the total votes cast. Additionally, political parties and the general population of Australia is obsessed with popularity in opinion polls which has a significant impact on a candidate’s chance of garnering the most votes. The terms are also quite short; a mere three years making it difficult for a candidate to implement their party manifesto and consequently, be scored accordingly. To counter the high turnover, the Labor party (one of the political parties in the country) has written down rules which had made it harder for one to be voted out. The rules have borne fruit, there is now more political stability of the Prime Minister. The effect of this in the business environment is that investors and businessmen will be more comfortable operating in an environment that guarantees a significant level of stability. Businesses will be able to make decisions and come up with strategic plans that spurn over a long period of time. Overall, the business environment will be conducive because politics is often directly related to the success or failure of a business. Political instability is often a cause for a business to make losses either due to bad policies or economic regulations that are controlled by the government.