Comments on Cost Management in Action Managing Profitability under Different Cost Structures Companies like American Airlines began offering super-low fares as a way to fend off the increaking competitien from discotint aitlines such as Southwest Airlines and European company Ryanair Holdings. The ability to fill seats at a low cest is what makes this approach attractive. Charging a super-low price and then adding a la carte pricing for stech amenities as preboarding seat selection and getting space for carry-on bags potentially provides an additional revenue stream from the a la carte services while filling seats with price-sensitive passengers who might have flown with a competitor. However; a low-cost provider option may be infeasible for the large airlines like American because of the structural cost drivers that are in place. These structural costs come from the hub-and-spoke appronch to routes and schedules, as well as labor agreements that are in place. Therefore, it makes sense to try to attract the luxury-minded customers who are willing to pay a high price for the amenities offered with the premium-priced seats. An example of the luxury is Delta's plans to add business-class suites on some flights. These suites are, effectively, small cabins that have fully reclining seats and can be closed off from others. Filling the front of the plane with premium-price passengers and then filling the seats in the back with budget-minded passengers creates a sales mix that can turn a flight in to a money maker rather than a money loser. Sourcess Robert Wot, MArtines Step Up Class Warefere-carriors Upgrado Perks for Premium Customers, While Cutting Amenitios for Low Fare Seats - The Wedt Struet Jownot: Apni 24, 2017, p. Bt, Robert Woll. Now Breed of Airline Upends World Tirvel, The Wall Stroct Journal, March 1a, 2017, p. Al Please read the above case about different cost structures of airlines. 1. Explain how product mix approach helped American airlines to attract more customers? 2. Explain how companies can reach to break-event and make profit with an appropriate product mix approach