What is minimum load factor at which company breaks even

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Reference no: EM131275845

AC Airways offers low cost air travel between Philadelphia and Atlantic City utilizing 4 planes worth a total of $12,000,000. Each plane, capable of carrying 60 passengers, makes 6 daily trips from Philadelphia to Atlantic City and 6 back from Atlantic City to Philadelphia. The price is $100 per one-way ticket. The current load factor is 65%. The annual cost of operation is $65,000,000 (labor, fuel, marketing, etc.). The company operates 365 days per year. What is the required load factor to gain an additional 10 percentage points in ROIC? What is the minimum load factor at which the company breaks even?

Reference no: EM131275845

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