The New England PatriotsLinks to an external site. were the first National Football League (NFL) franchise to buy its own team aircraft. The Patriots purchased two Boeing 767 planes for a total of about $10 million. Both planes have been painted with the team's logo and colors. Consider the following:

• The Patriots will use the planes for the ten round trips for its away games during the season. If the team would make the playoffs or Super Bowl, it would also use the planes for those games.
• If a franchise does not own its own planes, the costs of chartering planes is estimated to be about $4 million for the season.
• Patriots management has indicated that it may rent out the planes when not in use by the team.

• List the costs that a team could incur when chartering aircraft to fly its team to the away games. Use your imagination.
• List the costs that a team could incur when owning and flying its own aircraft for transporting the team to away games. Again, use your imagination.
• Compare your two lists of costs. What costs appear on both lists? What costs would have been relevant to the New England Patriots' aircraft purchase decision?
• What costs would be relevant to the pricing decision for renting the planes when not in use by the team?
• What qualitative factors would have influenced the Patriots' aircraft decision?
• Do you think aircraft depreciation is a relevant cost to consider when pricing the rental of the Patriots' aircraft? Why or why not?
• What tools that you've learned about could the Patriots have used to analyze this aircraft purchase decision?

Answer rating: 100% (QA)

Costs of Chartering Aircraft Charter Fees The basic cost of renting the aircraft for each trip Fuel Costs Airlines may pass on fuel costs to the chart... View the full answer