Ideal Airways is a small local carrier that flies among the northeast states. The company provides only one class of seats: coach. The following data are available:

Given this information:

Average full passenger fare $150

Number of seats per plane120

Average load factor (seats occupied) 70%

Average variable cost per passenger $ 40

Fixed operating costs per month $1,800,000

How do I find this?

• Ideal has experienced an increase in variable cost per passenger to $50 and an increase in total fixed operating costs to $2,000,000.The company has decided to raise the average fare to $180.What number of passengers is needed to generate a pre-tax income of $1,000,000?