Economics Commentary Essay

The article I have chosen to base my interpretation on is SpiceJet depraves 30 Q400 aircraft from the times of India (website) and the article was published on thirtieth of august, 2011. As the title suggests the article discusses about the recent acquisition make by SpiceJet of 30 Q400 aircrafts from Bombardier in order to bear upon out to more than of the tier 2 and tier 3 cities in India, where there is a potential demand which has not been yet met entirely. These cities include Aurangabad, Bhopal, Indore, Mangalore, Rajahmundry, Tirupati and Vijayawada excessively SpiceJet allow for start operating direct flights to cities that is not easily available a good deal(prenominal) as from Hyderabad to Goa and Madurai, Nagpur to Pune and Bangalore to Vizag.This plan to improve air connectivity by SpiceJet has given a lot of satisfaction to m some(prenominal) lot as their travel has been make much more easier for many citizens of India. Also this the first time that any airline in India has bought these new changes and it allows the company to have monopoly, when concerning these particular routes. by dint of these changes SpiceJet ordain be able to profit their customer base and reach out to a more niche market that had been previously neglect by them. This receipts in their route and by providing more aircrafts SpiceJet will enable them to add their supply therefore resulting in their prices to decrease (as put up be seen on diagram 1).Moreover the Q400 aircrafts atomic number 18 comparatively much more fuel efficient which not only decreases their cost and wherefore allows them to offer affordable journey to the common people but also improves their public image because it promotes them as being environmental friendly and consequently increase their demand thus bringing about an increase in the equilibrium quantity and price as well (as can be seen on diagram 2). Additionally it makes sure that SpiceJet would be less prone to criticism from N GOs or separate pressure groups.Q400 is considered to be the best short-haul trim and comparatively is more comfortable than other planes like it. This will increase the demand of this series of aircraft and most probably more of airlines companies would like to buy flights from bombardier these and hence the price would be increased (as can be seen by figure 3). In addition to this The Q400 aircraft due to its comfort would also derive SpiceJet as more passengers would like to travel through it compared to other airlines thus causing the demand curve to shift upwards and thus allowing the prices to increase notwithstanding further (as can be seen by figure 4).The Q400 aircraft are not only going to benefit SpiceJet but also millions of people and India as a whole since this would cause a drastic improvement in communications. Also it will set a trend for other airlines to also offer more routes and hence force the prices to go even lower as the competition will increase and the demand would fit comparatively elastic (as can be seen by diagram 5).