How much profit or loss per week is realized using a340-600

Reference no: EM13323732

A Chicago-based international air carrier plans to purchase a jumbo-class aircraft (Airbus A-340-600 or B777-200IGW) to serve the Chicago-London city pair. Restrictions in landing slots at Heathrow airport in London allowed the purchase of five landing/takeoff slots, one per weekday (Monday through Friday). The carrier does not intend to offer weekend service. Therefore, the carrier will offer daily round-trip flights Monday through Friday. The following table presents passenger demand estimates and fares charged by competitors:

TRIP weekly demand Fare
Chicago-London-Chicago 840 $920
Chicago-London (one way) 240 710
London-Chicago-London 925 960
London-Chicago (one way) 345 770

The airline company estimates that the average passenger load will be 95 percent, due to fluctuations in the demand for travel. Estimated passenger revenue should be calculated by proportionally assigning passengers from the different fare categories. Calculate the revenue for each direction (it will most likely be different).

The round trip Chicago-London-Chicago is 8100 miles and the aircraft choices and respective costs are as follows:

Aircraft Seating Operating Annual Fixed
Capacity cost per cost
seat-mile
B777-200IGW 310 11.25 cents $17.7 million
A340-600 385 11.55 cents $19.4 million

Can the airline operate at a profit using the B777-200IGW? How much profit or loss (per week) is realized using the B777-200IGW?

Can the airline operate at a profit using the A340-600? How much profit or loss (per week) is realized using the A340-600?

What Load Factor (percent of seats occupied) is required to break even using the B777-200IGW?

What Load Factor (%) is required to break even using the A340-600?

Reference no: EM13323732

Questions Cloud

Explain what is its vapour pressure when the pressure : Pressure was exerted with a piston on molten naphthalene at 95°C. The vapour pressure of naphthalene under 1.0 bar is 2.0 kPa and its densityis 0.962 g cm 3. What is its vapour pressure when the pressure on the liquid is 15 MPa

Determine the moment of the l6-n force about point b : A foot valve for a pneumatic systemis hinged at B. Knowing that a=28degrees, determine the moment of the l6-N force about point B by resolving the force into horizontal and vertical components

How close are the two charges : A positive charge of 0.800? C is located in a uniform field of 9.00×104 N/C. How close are the two charges

Steps of the capital budgeting process : Discuss the pros and cons of applying different investment decision rules when faced with the choice of investing corporate funds. Provide at least two examples.

How much profit or loss per week is realized using a340-600 : Restrictions in landing slots at Heathrow airport in London allowed the purchase of five landing/takeoff slots, one per weekday (Monday through Friday). The carrier does not intend to offer weekend service.

Efficient capital structures for a manufacturing company : Suggest the most efficient capital structures for a manufacturing company and software development firm. Support your argument with examples.

What circumstances might this theory be incorrect : The quantity theory of money states that changes in the money supply have predictable effects on the price level, or, in other words, that money growth determines inflation in the long run. Under what circumstances might this theory be incorrect? Bri..

What is concentration of compound a that remains after 16hrs : A first order reaction takes place in a batch reactor to remove an undesired contaminant (compound A) from a drinking water. The rate constant = 2.0 per day. The initial concentration = 75mg/L.

Discuss the elements of the site that work particularly well : Evaluate how well the design of the First IB web site meets the needs of a potential small business customer.

User Account

All Pages