Air Airlines Case Study Solution

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Register to read the introduction… Passengers 57000 55200 72000 96145

Q1 No. of planes (required) 5 5 4 3

4|Page

AN ANALYSIS OF FLY-BY-NIGHT AIRLINES

CALCULATIONS –TICKET REVENUE (Q2)

Q2) TICKET REVENUE (refer to Sch.2)

1. PER TICKET PRICING

The price of a ticket now costs $500. Every year, there is a growth in 5% compounding each year. To find the value of each ticket in

future, we use the formula FV = PV * (1+r).

2. NUMBER OF PASSENGERS

Then we find out the expected number of passengers instead of the full load. Economic data has stated the percentage according

to the plane models, so we multiply it with the full load passengers to find expected number of passengers.

3. TICKET REVENUE

Using the accurate per ticket pricing, we multiply it with the number of passengers calculated. This will give us the ticket revenue

per plane. Using the calculations of planes from question 1, we multiply the ticket revenue with the number of planes according to

plane models.

Total ticket revenue derived from option A is $3,102,584,407, option B $3,105,798,328, and option C
…show more content…
3,102,584,407 (3,038,402,564) (6,955,172) (4,000,000) (3,157,222) 1,578,611 2,421,389 (6,699,225) 3,349,613 650,387 (4,000,000) (12,041,226) (4,000,000) (10,955,172) (16,041,226) 5,477,586 8,020,613 (1,477,586) (4,020,613) (734,551) 64,181,843 (57,000,000) 7,181,843 (3,590,921) 60,590,921 1,045,333 3,885,738

TICKET REVENUE OPERATING COST 1,738,050 (3,000,000) (1,261,950) 630,975 2,369,025 1,779,884 25,000,000 (80,000,000) 8,562,190 8,303,284 7,943,589 7,464,908 6,846,159 6,062,938 5,087,012 9,124,380 (4,562,190) 8,606,567 (4,303,284) 7,887,179 (3,943,589) 6,929,817 (3,464,908) 5,692,319 (2,846,159) 4,125,876 (2,062,938) 2,174,025 (1,087,012) (228,524) 114,262 (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) 13,124,380 12,606,567 11,887,179 10,929,817 9,692,319 8,125,876 6,174,025 3,771,476 842,778 (4,000,000)

142,500,000 149,625,000 157,106,250 166,698,000 175,032,900 183,784,545 192,973,772 202,622,461 212,753,584 223,391,263 234,560,826 246,288,868 258,603,311 271,533,476 285,110,150 (138,500,000) (146,640,000) (155,368,200) (153,573,620) (162,426,333) (171,897,366) (182,043,955) (192,930,142) (204,627,708) (217,217,238) (230,789,351) (245,446,089) (261,302,536) (278,488,649) (297,151,376) (2,699,225)

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