Every airline has what is called a break-even load factor. That is, the percentage of seats the
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Since revenue and costs vary from one airline to another, so does the break-even factor. . . . Overall, the break-even load factor for the (airline) industry in recent years has been approximately 66 percent.”
The airline industry is notorious for boom and bust cycles. Why is airline profit-ability very sensitive to these cycles? Do you think that during a down cycle the strategy to consolidate routes and raise ticket prices is reasonable? What would make this strategy succeed or fail? Why?
Source: www.avjobs.com/history/airline-economics.asp
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