Southern Airlines is considering a proposal to initiate air service between Phoenix and Las Vegas. The route would be designed primarily to serve the tourist travelers (gamblers) that frequently travel between the two cities. By offering low cost tourist fares, the airline hopes to persuade persons who now travel by other modes of transportation to switch and fly Trans Western on this route. In addition, the airline expects to attract business travelers during the hours of 7 AM to 6 PM on Mondays through Fridays The fare schedule would be designed to charge a higher fare during business-travel hours so that tourist demand would be reduced during those hours. The company believes that a business fare of $40 one way during business hours and a fare of S30 for all other hours would result in the passenger load being equal during business-travel hours and tourist-travel hours. The airline will operate five business flights and three tourist flights each way every weekday, and ten tourist flights (but no business flights) each way every Saturday and Sunday To operate the route, the airline would need two 120-passenger jet aircraft. The aircraft would be leased at an annual cost of $2,800,000 each. Other fixed costs for ground services would amount to S1,940,000 per year (assume there are exactly 52 weeks in a year). Operation of each aircraft requires a flight crew whose salaries are based primarily on flying time. The costs of each flight crew are approximately S600 per hour of flying time. Fuel costs are estimated at $210 per hour of flying time. Flying time between Phoenix and Las Vegas is estimated at 45 minutes each way The costs associated with processing each passenger amount to $7 per flight (i.e., a return flight costs $14). This includes ticket processing, agent commissions, and variable costs of baggage handling. Any cost of food-and-beverage service is expected to be fully recovered through the charges levied for alcoholic beverages