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An international air carrier plans to purchase a jumbo - class aircraft to serve the ChicagoLondon city pair. Restrictions in landing slots at Heathrow Airport
An international air carrier plans to purchase a jumboclass aircraft to serve the ChicagoLondon city pair. Restrictions in landing slots at Heathrow Airport allowed the purchase of
five landingtakeoff slots, one per weekday. The carrier does not intend to offer weekend
service. The following table presents passenger demand estimates and fares charged by
competitors:
Fiveweekday Oneway
Trip demand fare$
ChicagoLondonChicago
ChicagoLondon
LondonChicagoLondon
LondonChicago
The roundtrip ChicagoLondonChicago is km and the aircraft choices and cOsts are:
Seating Oper. Cost Fixed
Aircraft capacity seatkm costyear
B $ million
DC $ million
Should the airline enact service and which aircraft shpuld be chosen? Solve based on profit
maximization.
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