Problem $11-23($Algo$)$ Dropping or Retaining a Flight $[$LO$11-2]$

In an effort to increase profits, Pegasus Airlines is thinking about dropping several flights that appear to be unprofitable.

A typical income statement for one round$-$trip of one such flight $($flight $482)$ is as follows:

The following additional information is available about flight $482$:

a$.$ Members of the flight crew are paid fixed annual salaries, whereas the flight assistants are paid based on the number of round trips

they complete.

b$.$ One$-$third of the liability insurance is a special charge assessed against flight $482$ because, in the opinion of the insurance company,

the destination of the flight is in a "high$-$risk" area. The remaining two$-$thirds would be unaffected by a decision to drop flight $482.$

c$.$ The baggage loading and flight preparation expense is an allocation of ground crews' salaries and depreciation of ground

equipment. Dropping flight $482$ would have no effect on these expenses.

d$.$ If flight $482$ is dropped, Pegasus Airlines will not replace it with another flight.

e$.$ Wear and tear on the aircraft caused by this flight is negligible.

f$.$ Dropping flight $482$ would not allow Pegasus Airlines to reduce the number of aircraft in its fleet or the number of flight crew on its

payroll.

Required:

What is the financial advantage $($disadvantage$)$ of discontinuing flight $482?$