As the flight manager you are required to prepare an operating budget for Year 3 with the following assumptions:

1. There is a recession on going with the expectation that costs must be reduced, even though the industry analysts forecast otherwise.
2. The cost of fuel will increase by 5% due to OPEC.
3. Crew salary and benefits will increase by 3%.
4. Maintenance labor will increase by 2%.
5. The goal of the Chief Financial Officer (CFO) is to keep costs consistent with year 2.

The CFO has challenged you to prepare a budget which could keep the aircraft total cost per hour consistent with year 2. You must present a budget identifying how you will accomplish this goal. Please be detailed with your assumptions and with explanations as to how you reached your goal.

There is no minimum length for this assignment but you must explain and show how you reached the values for each entry your year 3 into Tables 1 above. This assignment will be submitted via a Word document or .pdf below.

The American Pet Products Association (APPA) estimated that total U.S. Pet Industry Expenditures for 2016 would be as follows (view Table 2, 3, 4, tables are already in chronological order):