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Ignoring taxes and the $1million fee, what would ticket sales and profit from ticket sales for each year be? Please explain in detail and include
Ignoring taxes and the $1million fee, what would ticket sales and profit from ticket sales for each year be?
Please explain in detail and include any excel data used . Assume 180 passengers per trip.
Two new aircraft would have to be acquired through a lease agreement requiring monthly payments. When leasing aircraft, depreciation costs are not deductible. The company would have to pay a one-time fee of US$1,000,000 to acquire the operating rights to the two aircraft. One hundred new employees would have to be hired: sixty for aircraft operations and forty to improve customer service. Each aircraft would complete four frequencies (round trips) daily, 362 days a year, and would have three maintenance days per year. In 2016, the operating costs and expenses (including leasing) to become firmly established in the Colombian market would be US$18,811,000. These operating costs and expenses would increase by 20% in 2017 and by 22% in 2018. This would not include the initial US$1 million investment to obtain operating rights for the two new aircraft. These costs and expenses are associated with the operation of the two aircraft (fuel, airport parking, taxes, etc.) plus administrative, staffing, communications, and miscellaneous expenses. In 2015, the average price of a single VivaColombia domestic flight ticket is US$85. In an industry that is witnessing increased competition, this price would decrease to US$80 in 2016, US$78 in 2017, and US$76 in 2018. The income tax rate in Colombia is 33%
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