V
vicky .
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...total fixed cost for the flight.? The budget airline, FastJet, runs a fleet of Boebus 937 aircraft, each of which has 150 seats. The Boebus 937 cost £10M when new, a cost that is depreciated over 20 years. Finance costs are taken at 8% pa of original capital cost. A typical aircraft performs two thousand 2-hour flights per year.
FastJet makes 2000 flights annually between Stanrow and Nice on this route, outward and return. Each flight takes 2 hours. The airport charge per passenger is £5.50 at either end. The annual salary cost of the crew for this route is £800,000. Fuel costs £350 per flying hour. The annual maintenance cost for this route is £900,000. Ground handling (check-in, baggage handling and refuelling work) are bought from AeroServe at a cost of £500 per flight. Air traffic control costs for take-off, over-flight and landing come to £440 per flight.
Advertising and administration costs are charged equally to all the 50 routes covered by FastJet. FastJet's advertising budget is £20M per year, while administration comes to £90M per year.
Booking is solely via the Internet using a credit card. The average price of a ticket for the Nice flight is £45. A 2% credit-card charge is incurred by FastJet on each booking.
Consider a single flight from Stanrow to Nice.
1. Draw up a table of the fixed costs for this flight, and hence find the total fixed cost for the flight.
2.Draw up a table of the variable costs for this flight, and hence find the total variable cost.
3. Draw a graph of the break-even number of passengers against ticket price for the range £30 to £60 pounds. Mark on your graph the area where a profit will be made and the area where a loss will be made. What level of seat occupancy is needed to avoid a loss at an average ticket price of £45?
FastJet makes 2000 flights annually between Stanrow and Nice on this route, outward and return. Each flight takes 2 hours. The airport charge per passenger is £5.50 at either end. The annual salary cost of the crew for this route is £800,000. Fuel costs £350 per flying hour. The annual maintenance cost for this route is £900,000. Ground handling (check-in, baggage handling and refuelling work) are bought from AeroServe at a cost of £500 per flight. Air traffic control costs for take-off, over-flight and landing come to £440 per flight.
Advertising and administration costs are charged equally to all the 50 routes covered by FastJet. FastJet's advertising budget is £20M per year, while administration comes to £90M per year.
Booking is solely via the Internet using a credit card. The average price of a ticket for the Nice flight is £45. A 2% credit-card charge is incurred by FastJet on each booking.
Consider a single flight from Stanrow to Nice.
1. Draw up a table of the fixed costs for this flight, and hence find the total fixed cost for the flight.
2.Draw up a table of the variable costs for this flight, and hence find the total variable cost.
3. Draw a graph of the break-even number of passengers against ticket price for the range £30 to £60 pounds. Mark on your graph the area where a profit will be made and the area where a loss will be made. What level of seat occupancy is needed to avoid a loss at an average ticket price of £45?