Delay at Logan Airport Case Analysis

A. The table below lists each category and states whether the cost is relevant, if it is an implicit or explicit cost, and if the cost has been properly calculated (note: company is currently operating at 65% capacity).

3. What should be the average ticket price (for all ticket types combined--A through D) for the KFBS concert if the fixed-pay fee is $200,000 (rather than $160,635) and the Pavilion expects to sell 7,000 tickets and wants to earn $30,000 operating income after 40 percent in taxes?

v. What are the limitations, if any, to the estimates of the profitability of the two customers? (Hint: Consider what improvements could be made to the accounting system to obtain more accurate costs)

If the company can make every base take the same amount of time, they will experience less delays as less cars are stopped waiting for the next base to open up.

D. The companies cost of service would be reduced, giving the company the ability to lower the cost to customers.

Some of the big disadvantages of fining an airliner upward $15,000 plus is that the consumer has to pay a higher flight ticket to leave or come to the area. Another, disadvantages is more flight schedule will be backed up and delayed due to time restraints begin provided by the airport guideline.

All of the people waiting to catch their flight in the airport. No specific names given.

First of all, Anova Airlines (AOV) is a small, privately held passenger airline based out of New Orleans (MSY) in Louisiana. AOV provided us with comprehensive data on daily flight operations, revenues, and costs for each route for which it is permitted to carry passengers. Anova Airlines has some routes that are profitable, and it has some routes that are non-profitable. Consequently, the load factor between AOV routes vary from one another. Furthermore, there is a positive correlation between load factor and total revenues. Next, the elimination of baggage fees is predicted to have a negative impact on total revenues. Furthermore, it is advised to further study the data for future variances. From the results of the data, it is advised to

f. (Use original data). Springfield Express is considering offering a discounted fare of $ 120, which the company believes would increase the load factor to 80 percent. Only the additional seats would be sold at the discounted fare. Additional monthly advertising cost would be $ 180,000. How much pre-tax income would the discounted fare provide Springfield Express if the company has 50 passenger train cars per day, 30 days per month?

The question addressed is if the airline Southwest meets or exceeds the national rate for on-time performance at the Oklahoma City airport. The data collected from the BTS is categorized into either on-time or not on-time for Oklahoma City and nationwide. The BTS data was a complete collection from participating airlines, which consist of airlines with 1 percent or more of scheduled domestic passenger revenues. A Chi-Squared Goodness-of-Fit test was selected for use.

41. The sales forecast directly affects many elements of the master budget. Which of the following would be least affected by short-term fluctuations in the sales forecasts?

The cost of operating the company aircraft (for the purpose of this research study’s assumptions) is strictly based upon hours the aircraft is being operated, so it would have a flat rate of $1820 to fly everyone to Prague and back to Frankfurt. If the company was to have the meeting in Adana instead, it would cost $8948 to operate the aircraft. Once again, the number of passengers here is irrelevant to the cost – the total operating time is the key to this variable.

3. The base case is the $280 flight option, where d= 212 per flight. This gives the company a loss of $6,120,192. If the travel agent is going to deliver a better result, then that option should be undertaken. The financials for the new flights are as follows. The revenue is going to be $75,000 and there are no variable costs. There is no travel agent to pay commission to, and Travel International is picking up the costs associated with the food and beverage service, as well as the cost of fuel. Thus, the contribution to fixed costs is $75,000. This is much higher than the contribution West Coast Air normally gets from a flight.

The turn-around time can be prolonged due to weather delays, security delays or technical difficulties. The weather is a factor that the airline cannot control, but the delay can be predicted and prevented with alternative flight plans. Southwest airlines can experience security delays like any other airlines and the company has little influence on this factor. On the other hand, the technical problems can be divided on the ones that can be controlled by the company, and on technical delays caused by the national aviation system. The company can work on prevention of the technical types of delays with different technological improvements and employee trainings. The objective for the company is to have the capability to adapt its schedule to these factors and reduce their impact on the company’s utilization.

Feedback: C is the correct answer. Capacity utilization rate = Capacity used/ best operating level