Route C really profitable?

Question

Hi all,

I stumbled across the answer to question 3, which states that route C is very profitable.

If the break even number of passengers per hour is 70, then we would at least need 140 passengers e.g. in the time between 7-9 to be profitable. But utilization is only 120 passengers, so it does not look profitable.

Am I missing something?

Thanks!

David

Answer 1

Hi David,

Perhaps the exhibit shows hourly demand in 2h intervals so you have 120 pax 7-8 and 120 pax 8-9. It would be worth clarifying the unit on the exhibit.

Hope this helps!

Answer 2

The explanation is wrong but the answer is right. There is a mistake in the first part of the explanation, where a 10... (read entire answer)

The explanation is wrong but the answer is right. There is a mistake in the first part of the explanation, where a 10 should be a 20. Cost per trip = (420k / 300k + 0.5) * 20 +... (read entire answer)