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b. Passenger Revenue: The number of flights between St. George and SLC increased from 730 per year to 1275 per year. The average fare on
b. Passenger Revenue: The number of flights between St. George and SLC increased from 730 per year to 1275 per year. The average fare on Route 1 increased from $42 to $44. The average percentage of seats filled increased 80% to 90%. On Route 2 the average fare remained the same, but the average percentage of seats filled increased from 65% to 90%. Route 3 was cancelled and replaced with charter service. The new Charter Service generates an average of $1200 per day. Management expects that there will be demand for approximately 200 days of Charter Service during 1976. Assume that all passenger revenues are collected in cash. The increase in passenger revenues is driven primarily by improved service and through additional advertising and promotional expenses. (Note: Don't worry about recording Passenger Fuel Expense until after you've read item e below)
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