3. price elasticity of demand of the Airline industry in Singapore (Corwinn, rane, zt))
support from the key sources:
- Generally, the airline industry in Singapore is rather elastic as the consumers are sensitive to the price changes.
- When the price of the air rates decrease, the demand of tickets will increase, and vice versa. This can be observed from the mispricing of business tickets for as much as half their actual price in 2014, where over 900 tickets that were sold over the span of 2 days.
- Flight tickets are typically quite expensive and takes up a large proportion of income for the average person. This is evident in the number of low-cost carriers in Singapore which makes the Singaporean airline industry is highly price elastic (Proportion of income)
-Singapore Airlines offer 3 to 5 different seat classes which shows that is a rather elastic industry since it isn’t a necessity to have so many types of classes (Neccessities&Luxury)
-Since Singapore is a geographically small country, travelling from one end to another does not require the use of airplanes. Hence, comparing outbound flights alone, only some short routes can be substituted by train or car travel. Otherwise, travelling long routes by these substitutes would be time-consuming and even more expensive at times. Therefore, there are no practical alternatives to flying in Singapore, making the threats of substitute in this industry moderate. Hence, due to the availability of substitute of long haul flights, the price is inelastic. (availability of substitutes)

Constant 2005 Prices, $ billion

Year 2016 Value 217.0 Growth 3.1

Year 2017 Value 224.0 Growth 3.2

Year 2018 Value 231.9 Growth 3.5

Year 2019 Value 240.6 Growth 3.7

Year 2020 Value 250.2 Growth 4.0

Current Prices, $ billion

Year 2016 Value 337.4 Growth 4.8

Year 2017 Value 353.3 Growth 4.7

Year 2018 Value 370.8 Growth 4.9

Year 2019 Value 390.0 Growth 5.2

Year 2020 Value 412.1 Growth 5.7

In 2021, there was a 7.1% growth in the third quarter on a year-on-year basis. Although this is slower than the 15.2% growth from last quarter, this has increased the GDP of the first 3 quarter to 7.7%. The travel restrictions and strict measurements against the virus continues to hinder the growth of the aviation, tourism and arts, entertainment recreation industry. In contrast,  outward-orientated industries such as electronics and finance and insurance has been growing better than expected. The shortage of labour in the construction and marine and offshore engineering sectors was alleviated when the government allowed the entry of migrant workers from South Asia as well as Myanmar into the country. After assessing the growth of the first 3 quarter of 2021, it was forecasted that the GDP growth for the year of 2021 would be around 7%.
It was also forecasted that the Singapore economy is expected to grow by 3-5% in 2022.

 Labour market situation
- The employment rate for residents rose to 67.2 per cent in June this year, compared with 64.5 per cent a year ago
- In particular, the employment rate of youths aged 15 to 24 rose to 37.2 per cent in June, up from 30.9 per cent a year ago due to an increase in temporary positions related to managing Covid-19 such as safe-distancing ambassadors
- Thousands of employees in aviation companies were laid off as a result of the aviation industry being hit hardest amid the travel restrictions
Eg. Singapore airlines announced last year end that they had to cut approximately 4300 staffs due to factors such as reduction of flight capacity
- However, with consistent vaccine roll-outs and the expansion of vaccinated travel lanes (VTL), the industry is seeing signs of recovery
- With this positive growth in the second half of 2021, aviation companies plan to hire 1000 people over the next 2 years

General price trends
Singapore Inflation

Inflation Rate (%)

Year 2016 Value 2.6

Year 2017 Value 2.4

Year 2018 Value 2.3

Year 2019 Value 2.4

Year 2020 Value 2.2

According to additional source 1, overall consumer price index (CPI) increased to 3.8% year-on-year for November 2021
Some significant price changes:
- Food prices increased to 1.9% due to rise in prices of non-cooked food
- Transport prices had a large increase to 14.2% due to the rise in COE premiums which led to the sharp rise of private transport costs. With the release of VTLs, the increase in demand for air transport also contributed to the inflation.
- Clothing prices decreased to 6.6% which could be due to safe management measures which has restricted social events, resulting in lesser office or formal wear required

Significance of industry/Government support
-The industry plays a vital role in SG's economy as they contribute immensely through the ability to connect with cities around the world.
-Many jobs are supported by the industry itself or other industries directly linked to them(aviation industry), and hence was able to generate gross value of $36.6billion to the GDP
-The government supported by providing a large budget and many rebates, hoping to maintain the industry knowing of its importance to the country's economy.
-VTL was pushed for more to start travelling overseas and into SG, and hence boosting foreign tourist spendings.

Government measures 
- In view of the COVID-19 pandemic, the government has implemented the extension of support measures in the Stabilisation and Support Package and the Enhanced Aviation Support Package for the aviation sector
- In total, $187 million will be allocated to extend the support
- The support would include cost relief through landing and parking rebates, and rent relief, for airlines, ground handlers, cargo agents and other airport partners at Changi Airport and Seletar Airport
- The government would also continue to provide funding support to Singapore carriers to rebuild our air connectivity to the world

Thanks for sharing your prelim analysis with me. You’ll find below, feedback from me for your second stage work. Please note that the grow areas are specific to what I read on your padlet wall. It doesn’t mean these are all you need to do, to deepen your analysis for stage 3 presentation. I’m sure you’ll find more concepts or new info to deepen your analysis along the way. So feel free to expand your analysis. It also doesn’t mean that you have to address all that I’ve mentioned below. As a team, discuss and come to a consensus. 

Just to be clear, there is no need to amend your prelim analysis on padlet. My feedback are meant for you to consider when you work on deepening your analysis in stage 3 (Presentation and the slides)

Glows:
I like that the Team revealed understanding in covering the overall economic outlook before analysing the specific industry (Aviation) to some extent. Good work in making reference to relevant articles and reports from recognised sources. Be sure to revisit these sources (in addition to new ones) as you work on your slides to avoid missing out the gems (esp the IATA report).

Grow areas:
Room for growth in terms of applying more economic concepts to your analysis.

Specific comments:
GDP
Good work in identifying the key sectors. Next step would be to deeper the analysis. Suggestion - how significant in terms of % or revenue generation. Do also find out on this for Aviation if possible.

The key causes impacting GDP could be deepened. E.g How travel restriction impact GDP using the expenditure formula. E.g. Why exports is important to SG and what do we exports and so on

Employment situation
Since we are looking at the big picture, it'll be good to look at the overall employment situation in SG first before focusing on aviation.

Good find on ambassadors and the figures to support retrenchments in the aviation sector. As you research further on such moves to cut costs across sector, try to identify this type of unemployment.

Inflation
Pretty good stuff here. Key causes were mentioned and reasons provided, except for the increase in price of cooked food. Take a look at all the causes and try to identify whether its demand pull and or cost push inflation.

Policies
Yeap, relevant policies, keep working on it!