4. Stating your assumptions, estimate the revenue (£) that might be earned by the BA London Eye in its first year on the basis of the forecast passenger numbers. What might have to be done to increase the yield in subsequent years? What information should be collected during 2000 by the operators (the Tussauds Group) that would help develop a yield management strategy to maximize revenue and profits? Would these be consistent with the marketing objectives of the sponsor, the British Airways? The British Airways London Eye is the world’s largest observation wheel and one of the UK’s most spectacular tourist attractions. It’s height is over twice that of the famous Prater Wheel in Vienna, but has three key design differences compared with any such conventional Ferris wheel:

firstly, the passenger capsules are fully enclosed and air conditioned; secondly, they are positioned on the outside of the wheel structure and do not hang down; and thirdly, the entire structure is supported on an A-frame from one side only, so it can be cantilevered out over the River Thames.

The 32 passenger capsules, fixed on the perimeter of the 135-metre diameter rim, each can hold 25 people. The wheel rotates continuously, so, to enter, customers have to step into the capsules, which are moving at 0.26 metres per second, which is a quarter of the normal walking speed.

One complete 360-degree rotation takes 30 minutes, at the end of which the doors open and passengers disembark. Boarding and disembarkation are separated on the specially designed platform that is built over the river.