The Federal Reserve is known as the privately-operated central banking system of the United States. This system is composed of twelve regional Federal Reverse banks around the US in major cities. This system is also comprised of a central board of governors that are located in Washington D.C. The chairman of the board of Governors is Alan Greenspan. The main role of the Federal Reserve is to supervise and regulate banks. According to NationMaster.com the reserve is doing fine. Trying to forecast down the road can present problems as we don't know what will happen next. The Federal Reserve recently looked at raising interest rates. Looking at the airlines, they took a real hit over the last several years because of the terrorist attacks back in 2001. Although some airlines have rebounded, the travel from the United States took a hard hit and has been slow to recover. Looking at Capacity Utilization, this used to be an easy way of filling seats but again, after the attacks of nine eleven, it was hard to fill seats. SouthWest airlines seemed to be one of the only airlines that weren't hurt by these actions and then again, even South West had to reevaluate the companies' stance on free seats as recently it was mentioned in the local news that SouthWest was doing away with its free seats. (Swett, 2005).
In contrast to now, some airlines are taking a dive while the Federal Reserve still holds strong but with that have been steep increases in gasoline prices and transportation costs. With these increases, we are seeing major airlines start to fold up and layoff people. I believe that if there are not some major changes soon, America will be feeling the crunch in more ways than one.
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