Question 3 (50p) : Arel airlines are experiencing hard times due to the pandemic. It wants to determine the future fleet structure by using historical financial data. Their main purpose is to maximize their annual profits. All flight and financial data of 2020, when the pandemic started, were examined. The cost structure of the company, which consists of 3 different aircraft, is shown on graph and the following formulas are used for cost calculations, respectively. a) Compute best case scenario revenues for each aircraft by using highest percentages of occupancy rate and charter flight amount b) Compute the worst case scenario revenues for each aircraft by using lowest percentages of occupancy rate and charter flight amount. c) If hours flown will be same at 500, occupancy rate and charter flight percentages are constant at %88 and %20, how situation a and b changes? Make comments on it. Annual Profit = Annual Total Revenue - Annual Total Cost Total Revenue - Revenue from Charters + Revenue from scheduled flights Total Cost = Variable Cost+Fixed Cost Revenue from Charters - (Charter Ratio)*(Hours flown per year)"Charter Price Revenue from Schedules Flights = (1-Charter Ratio)*(Hours flown per year)*(Ticket price perhour)*(Number of Seats)*(Average Occupancy) Fixed Cost Insurance + (Purchase Price)* % Financed)*(Interest Rate) Variable Cost = (Hours flown per year)" (Operating Cost) urtes A320 NEOBoring TI? MAXI Artis 1930 167 EN 180 so 120 275 315 Number of New Howrse Chartere perber The piper Derepancy rules Sched By Sof charter flight *71 300 10 29.000000 TO sin Ire Prepared laterale Purchase 10. 3. 132 90 1. Rare Chart Rewarframe Scheduled the The Cul Vera C . 65.00 12 10 30.500 11000 15.000 100 Airbus A320 NEO Boeing 737 MAX8 Airbus A220 Number of Seats 167 189 120 Hours Flown 500 75 300 Charter price per hour 300 275 315 Ticket price per hour 106 88 79 Occupancy rate on Scheduled flights %72-88% %70 - 84% %80 - 92% % of charter flights 25% - %35 60% - %80 40% - %60 Operating cost per hour 240 190 200 Insurance 21.000.000 29.000.000 23.000.000 Proportion Financed 40% 100% 80% Interest rate 10,50% 11% 13% Purchase Price 85.000.000 120.000.000 81.000.000 Revenue From Charters Revenue from Scheduled Flights Fixed Cost Variable Cost 91.000 79.000 20.500 110.000 890.000 65.000 12.000 165.000 1.100.000 92.000 15.000 190.000 Question 3 (50p) : Arel airlines are experiencing hard times due to the pandemic. It wants to determine the future fleet structure by using historical financial data. Their main purpose is to maximize their annual profits. All flight and financial data of 2020, when the pandemic started, were examined. The cost structure of the company, which consists of 3 different aircraft, is shown on graph and the following formulas are used for cost calculations, respectively. a) Compute best case scenario revenues for each aircraft by using highest percentages of occupancy rate and charter flight amount. b) Compute the worst case scenario revenues for each aircraft by using lowest percentages of occupancy rate and charter flight amount. c) If hours flown will be same at 500, occupancy rate and charter flight percentages are constant at %88 and %20, how situation a and b changes? Make comments on it. Annual Profit = Annual Total Revenue - Annual Total Cost Total Revenue = Revenue from Charters + Revenue from scheduled flights Total Cost = Variable Cost + Fixed Cost Revenue from Charters = (Charter Ratio)*(Hours flown per year)*Charter Price Revenue from Schedules Flights = (1-Charter Ratio)*(Hours flown per year)*(Ticket price perhour)*(Number of Seats)*(Average Occupancy) . Fixed Cost = Insurance + (Purchase Price)*(% Financed)*(Interest Rate) Variable Cost = (Hours flown per year)*(Operating Cost) Number of Seats Hours Flown Airbus A320 NEO Boeing 737 MAX& Airbus A220 167 189 120 500 75 300 00
