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# Airway express has an evening flight from Los Angeles to New

### Resolved Question:

Airway express has an evening flight from Los Angeles to New York with an average of 80 passengers and a return flight the next afternoon with an average of 50 passengers. The plane makes no other trip. The charge for the plane remaining in NY overnight is \$1200 and would be zero in LA. The airline is contemplating eliminated the night flight out to LA and replacing it with a morning flight. The estimated number of passengers is 70 in the morning flight and 50 in the return afternoon flight. The one way ticket for any flight is \$200. The operating cost of the plane for each flight is \$11,000. The fixed costs for the plane are \$3,000 per day whether it flies or not.
3(a): Please calculate and compare the profit under each flight.
3(b):   Should the airline remain in business? Note: 3b is asking should Airway Express continue providing the flight between Los Angeles and New York? Even Airway Express decides not to fly,   it still have to pay the fixed costs of \$3,000 per day
Submitted: 8 years ago.
Category: Homework
Expert:  Susan Athena replied 8 years ago.