Question
How many tickets should A airlines sell to reach to a Break-even Point? The following information is provided by A airlines and they are seeking
How many tickets should A airlines sell to reach to a Break-even Point?
The following information is provided by A airlines and they are seeking your professional advice on how much tickets they should sell in one of their sector flight to reach to a break even point. The Breakeven point is assigned by their Board of Directors to ensure the airlines survive financially during the COVID19:
Variable Cost per hour (B737): $5,000
Annual Fixed Cost: $8,000,000
Fixed cost per flight: $4,444.44 (Total fixed cost/No. of flights in year, assumed)
KBL-IST Flight?
Flight Duration: 5 Hours
No. of flights in the year, assumed: 1,800 flights (5 flights per week)
Variable Cost per hour (B737): $5,000
The Aircraft (B737): 120 seats, can carry up to 120 passengers
Variable Cost per Passenger: $208 ($25,000/120 seats)
Total Variable Cost per IST one-way flight (B737): $25,000 ($5,000 X5 H) for B737 aircraft
Fixed cost per flight, assumed: $4,444.44 (Total fixed cost/No. of flights in year
Price per ticket one-way: $345
Required:
How much tickets they should sell in the KBL-IST flight to reach to a break-even point?
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