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Suppose a particular charter Airline has annual fixed costs of $3.2 million for its One B777 Aircraft (capacity of 400 seat)-that operates daily flights between

Suppose a particular charter Airline has annual fixed costs of $3.2 million for its One B777 Aircraft (capacity of 400 seat)-that operates daily flights between Dubai (DXB) and Muscat (MCT). The average ticket fare per seat is $50, and average seat variable operating costs of $10 for each seat sold. The charter Airline operates daily all year long (365 days per year)?

  • 1. Calculate the net income the charter airline will generate if:
  • a) All the seats are filled throughout the year;
  • b) Half the seats are filled throughout the year.
  • 2. Compute the break-even point in number of seats sold. What percentage load factor for the year is needed to break even?

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