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Will rate if correct please show work ! Problem 2 Denver-based Frontier Airlines provides services to nearly 80 cities across the US, Caribbean, Mexico, and

Will rate if correct please show work ! image text in transcribed
Problem 2 Denver-based Frontier Airlines provides services to nearly 80 cities across the US, Caribbean, Mexico, and Canada. The company operates a fleet of aircraft, including several 134-passenger Boeing 737-300 jets. Currently, each 134-seat 737 airplane operates at an average 56% load factor. That is, on average the airplane has 75 passengers (56% x 134). The regular fares produce an average revenue of 12 cents per passenger-mile Frontier is considering a discount airfare program to boost passenger load. The company estimates that an average 40% fare discount, which is subject to restrictions regarding time of departure and length of stay, will produce three additional new passengers on each plane. However, Frontier also estimates that five of the previously committed passengers will accept the restrictions and switch to the discount fare from the regular fare. Requirements Should Frontier implement the fare discount program? Why or why not? (4 points) Suppose that the maximum allocation for the new fare discount is 30 seats, and that these seats will be filled. How many of the 75 originally committed passengers can switch to the discount fare before the discount program fails to produce additional revenue? (3 points) Suppose that Frontier determines each flight will need an additional flight attendant as a result of the increase in passengers on the flight. For a typical flight of 500 miles, one flight attendant costs approximately $300. As in requirement 2, assume that the discounted fares are limited to 30 passengers, and these fares will be sold. How full must the plane be (total passengers) in order to maintain the current level of profitability for the average 500-mile flight? (3 points) I. 2. 3

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