Revenue could be simplified as a product of the 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
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.
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.