Question
The following information is provided by Dubai airlines and they are seeking your professional advice on how much tickets they should sell in one of
The following information is provided by Dubai airlines and they are seeking your professional advice on how much tickets they should sell in one of their sector flight to reach to a break even point. The Breakeven point is assigned by their Board of Directors to ensure the airlines survive financially during the COVID19:
Variable Cost per hour (B737): $5,000
Annual Fixed Cost: $8,000,000
Fixed cost per flight: $4,444.44 (Total fixed cost/No. of flights in year, assumed)
Dubai-ist Flight?
Flight Duration: 5 Hours
No. of flights in the year, assumed: 1,800 flights (5 flights per day)
Variable Cost per hour (B737): $5,000
The Aircraft (B737): 120 seats, can carry up to 120 passengers
Variable Cost per Passenger: $208 ($25,000/120 seats)
Total Variable Cost per IST one-way flight (B737): $25,000 ($5,000 X5 H) for B737 aircraft
Fixed cost per flight, assumed: $4,444.44 (Total fixed cost/No. of flights in year
Price per ticket one-way: $345
Required:
How much tickets they should sell in the Dubai-IST flight to reach to a break-even point?
plz answer briefly and completely.
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