Cost Analysis Of Airline Industry

Break-even comparability Fixed price + (variable be x genuine passengers) Is advert to earn along with x actual passengers For Flight WC0102, this is how we would realise this equation : COSTS=REVENUE 10,000 + 50 x P=200 x P =>10,000=150 x P =>P=10,000 150 =>=66.66 =>=67 So, we croup analyze that trajectory WC0102 essential sell 67 seats in order to moisten even. This is the confidential information at which court matches revenue for that particular flight. Anything at a lower place 67 passengers, and it will lose money, anything above 67, and it make money. mete costing is used to work come out of the confine the victuals which should be efflorescenced at any wedded point. In other words, when you know the fixed and variable cost for a flight, you can then work out how such(prenominal) to raise up each passenger. For example, the 25th passenger will non have the comparable mariginal cost (i.e. will not be ch arged the resembling fare) as the 50 th passenger. Again, we can illustrate this point by using a dewy-eyed formula, as follows: peripheral cost formula for x passengers (x = 50 in this example) Fare for Passenger no.

P =Fixed Cost+ uncertain cost per Passenger P Where x = 50 =>10,000+50 50 =>250This is the marginal cost and hence the fare you should charge the 50 passengers, if you weigh this is the people you will achieve practice session of other marginal costs for flight WC0102 are (Note : if we believe this is the volume we will achieve, then this represents the fare we should charg e in order to break even ) P = 1Marginal ! Cost=10050i.e10,000 + 50 1 P = 10Marginal Cost=1050i.e10,000 + 50 10 P = 25Marginal Cost=450i.e10,000 + 50 25 P = 50Marginal Cost=250i.e10,000 + 50 50 P = 100Marginal Cost=150i.e10,000 + 50 100If you want to get a in full essay, order it on our website: OrderCustomPaper.com

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