Question

Pacific Airways is considering a new service offering tickets at half price. Each flight has a capacity of 150 seats, with an average of 125 seats sold per flight at an average ticket price of $180. If the new discounted tickets are introduced, an average of 8 existing passengers and 15 new passengers would use them. What would be the potential revenue impact of this new service per flight?

a. $10,800
b. $12,600
c. $14,400
d. $16,200

Answer 1

The potential revenue impact of the new discounted tickets per flight would be $9,192.

Step-by-step explanation:

To calculate the potential revenue impact of the new discounted tickets, we need to calculate the revenue before and after introducing the discounted tickets.

Before the introduction of discounted tickets:

1. Number of seats sold per flight: 125
2. Average ticket price: $180
3. Total revenue per flight before discount: 125 x $180 = $<<125*180=22500>>22,500

After the introduction of discounted tickets:

1. Number of seats sold per flight with discounted tickets: 125 + 8 + 15 = 148
2. Average ticket price with discount: $180 / 2 = $90
3. Total revenue per flight after discount: 148 x $90 = $<<148*90=13320>>13,320

The potential revenue impact per flight is the difference between the revenue before and after the introduction of discounted tickets:

Potential revenue impact per flight = $22,500 - $13,320 = $<<22500-13320=9192>>9,192

Therefore, the potential revenue impact of this new service per flight is $9,192. Option d. $16,200 is incorrect.