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17/09/2018 07:55:25 AM

The exchange rate regime of the European countries affects on Quantas Airline

According to the AirlineRating.com, Qantas was rated the number one safest airline in the world based on 7 star rating system. Therefore, Qantas becomes the priority choice of European passengers for a long distance travel. Flying with A380 aircraft together with offering one- stop connections to more than 40 destinations across European countries, customers can have more options to meet their needs and expectations because of its flexibility. Another reason why Qantas can survive in European market competition is that flying with Qantas, European customers can enjoy using their personal electronic devices such as smart phones and music players during the trip; whereas, its unique service may not be found in any other airlines. All of these evidences clarify the reasons why Qantas can stand out and create excellence effect on the European competitive market.

One of the most significant key of globalization economy world –wide is the exchange rate which helps to sustain equilibrium across the financial and economic.The bilateral exchange rate against European euro (AUD/Euro) is trading of Australian dollars on European market of Qantas-Airway service.Base on Bretton Woods agreement in 1944 stated that International Monetery Fund was established to create fixed exchange rate system (Johannes.D , 1998). After 1971, the exchange rate is able to float by President Richard Nixon that means foreign exchange is no longer fixed in market place. In European Monetary System, as the crisis showed in 1992-1993when the euro is created(Michael H, Arthur L & David K, 2012).This leads domestic monetary policies more effective than another country in Euro to free from exchange rate commitment. The exchange rate has a critical role in real economy to impact on Macroeconomic stability, so European must have a flexible exchange regime. In addition to maintaining external and internal balance, it also has an automatic stabilizer which is a metallic standard to fix exchange rate regime.For example,European depreciated, that leads Australian currency is going up with low exchange rate (EU/AUD). In this case, Australian will travel more in their vacation. Therefore, the impact of floating exchange rate is the greatest method for controlling monetary discipline.