Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., Stripe, Paypal).

Manage settings individually I accept

Airline Economics

Solved 14.4k times
Airline Economics We are an airline major operating out of India. We want to increase the number of passengers on all our flights. Could you please calculate the financial return of adding one more passenger per flight?
4.3 5 667

Problem Definition

We are an airline major operating out of India. We want to increase the number of passengers on all our flights. Could you please calculate the financial return of adding one more passenger per flight?


The case is designed to be presented to the candidate by an interviewer, who plays the role of a represetative of an Indian airline major.

Short Solution (Expand)

Detailed Solution

Paragraphs highlighted in blue can be verbally communicated to the interviewee.

Paragraphs highlighted in orange indicate hints for you how to guide the interviewee through the case.

To calculate the financial return or the extra profit, the candidate needs to look at the revenue and costs associated with adding one more passenger per flight.

If asked, let the candidate know that there is enough capacity to put at least one more passenger in each flight.

I. Revenue Analysis

Revenue could be simplified as a product of average price of a ticket and number of new passengers added.

1. Average ticket price

  • 50% of the flights fly between New Delhi and Mumbai; on average, a passenger pays $100 for this 2 hour journey
  • 25% of the flights fly between other major cities which are 2.5 hours away from each other. We charge the passenger $100 for these flights
  • The remaining 25% of the flights fly between other cities which are 3 hours away from each other. The average ticket price for these flights is $200

Therefore the average ticket price would be (50% X $100 + 25% X $100 + 25% X $200) or $125.

2. Number of new passengers

We know that number of new passengers would be equal to the number of total flights since we only add one more passenger per flight.

Therefore we should first estimate the number of airplanes owned by the firm and then the number of flights each airplane takes.

There are many ways to estimate the number of new passengers. For instance, the candidate could also calculate the number of flights by multiplying the number of routes with the average number of flights per route.

The company owns 110 planes. The candidate can assume that 50% of the total flights take the 2 hour route, 25% take the 2.5 hour route and the remaining 25% take the 3 hour route.

This gives us:

  • Delhi-Mumbai, 2 hours route - 50% of 100 or 50 planes
  • Major cities, 2.5 hours route - 25% of 100 or 25 planes
  • Other cities, 3 hours route - 25% of 100 or 25 planes

Airplane companies usually spend a lot of money on maintenance. Therefore out of the total 110 planes the firm owns, 10 are usually under maintenance. Correct the candidate if he assumes any other number.

To estimate the number of flights per airplane per day, we need to figure out the following:

  • Total flight time: When does the first airplane depart? When does the last airplane of the day arrive?
  • On ground time: How much time does on ground jobs such as taxing, cleaning and boarding need?

Allow the candidate to make his own assumptions for the above timings. The aim is not to meet the correct answer but the process and kind of assumptions the candidate makes to estimate that number.

Assumptions: The total flight time is 15 hours and on ground time per flight is 1 hour.

  • Delhi-Mumbai, 2 hours flight: 15 hours/3 hours or 5 flights per plane per day
  • Major cities, 2.5 hours flight: 15 hours/3.5 hours or about 4 flights per plane per day
  • Other cities, 3 hours flight: 15 hours/4 hours or 3 flights per plane per day

Total flights:

  • Delhi-Mumbai, 2 hours flight: 5 X 50 or 250 flights per day
  • Major cities, 2.5 hours flight: 4 X 25 or 100 flights per day
  • Other cities, 3 hours flight: 3 X 25 or 75 flights per day

Total flights = 250 + 100 + 75 = 425 flights per day.

Therefore, the monthly extra revenue would be 425 flights/day X 30 days X $125 or about $1,600,000.

II. Cost Analysis

The marginal cost of one additional passenger per flight would be zero since most costs would occur anyways.

III. Conclusion

Since the marginal cost is zero, the monthly extra revenue is the monthly extra profit. Therefore the financial return of addition of one more passenger per flight would be about $1,600,000 per month.

Difficult Questions

If the interviewee solves the case very quickly, you can discuss the marketing strategy to attract more passengers with him.

Questions on this case
3 Inaccurate calculation bad impression
Book a coaching with Antonello

98% Recommendation Rate

103 Meetings

1,986 Q&A Upvotes

USD 189 / Coaching

Hi Ronnie, it will not be a problem. If you want to be sure, feel free to ask the interviewer if you can proceed with the approximation. Best, Antonello

Related BootCamp article(s)

Typical Question Types in Written Tests

Questions among all tests can be categorized in math, GMAT-style, chart reading and brain teaser questions. Each type needs to be approached differently.

Why Math matters

Your math skills will be tested in each and every consulting interview. So you better brush up mental math skills to succeed.


Profitability Case

Learn to crack Profitability Framework Consulting Cases, which are the number 1 reason for real consulting projects and hence are an important case type.

1 Q&A Quiz

Market Sizing

Market Sizing Questions are used to test your quantitative & reasoning skills. Learn more on how interviewers evaluate your given answer!

2 Q&As

Important Facts

It's essential to know some key figures regarding geographies, population, economies for your case interviews. We summarized them for you here.

1 Q&A
4.3 (667 ratings)
4.3 5 667
Show all questions on this case (1)
Case exhibits

No case exhibits yet