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Airline Operations Under FAR 135 Being the aircraft operator under the Federal Aviation Regulation 135 is a very complicated and responsible task. The approval for operating in these conditions is usually given to large aviation companies, which operate in heavily loaded destination and utilize the latest and most capacious aircrafts. Given the case of FAR 135 and New York-Los Angeles route with two flights per day I will examine what it takes the airline operator to provide stability and, in case of best practice, sustainable development of its business. Every business enterprise should be approached with great care and fundamental SWOT analysis together with strong financial analysis and market forecasts. When we deal with airlines, a very costly industry, which can instantly make the investor bankrupt, we need to be especially accurate. Let us assume that the two flights we operate are generating average seat occupancy of 85 % in the morning and 45 % in the evening.
Viewed from this perspective I will analyze the potential financial results the company can generate and the factors that must be given a close consideration when making decisions. The general analysis of the trends of business must begin with the analysis of macroeconomic indicators for the airline industry. The factors that will affect our performance will include: demand and supply of air travel, the trends in airline output, cost, and pricing strategy. On the example of September 11, 2001, we can see that demand and supply is a very rapidly changing factor, which can bring both the success and failure. However, in our case we must be more concerned with the fixed and variable costs of running the enterprise. These costs will include: fuel, salaries for personnel, airport collections, and miscellaneous costs of running routine business.
When forecasting the operational revenue we must not forget to cover all of these costs, plus provide for the force majeure conditions of the market (the example would be a suddenly rising price of the fuel). It is a common knowledge fact that airline tickets are sold at overstated prices just with the purpose of covering the cost of the flight. The usual ticked is often 1. 3 to 2 times more expensive than it should be just for the reason that in this case one passenger will cover the expenses of transporting two clients. In other words, I pay for myself plus for a free seat beside me (the place the ticket to which was not initially sold).
If we are to accept this approach we will be absorbing more costs with the morning flight, and cover the expenses of the evening flight. Fr a deeper analysis f ur flights we can address the basic statistics, which given much f the airline business. Available seat miles (ASM) the that f all the seats available n every airline rate, multiplied by the length f the rate are the benchmark f an airlines that capacity. Revenue passenger miles (RPM) shw the number f seat-miles fr which the airline is actually filling a seat and making my. Revenue, r yield, per RPM shw's hw much an airline will make n each filled seat n each mile it flies. To turn a profit, ASM and RPM need to be as close as possible; it means that we want our seats filled at least enough for the so-called passenger load factor (how many revenue is absorbed in unoccupied seats) to rise above a breakeven point.
After analyzing this we may come to an obvious conclusion that the evening flight is not as profitable to us as we would want it to be. The first choice could be to abandon this flight. However, for the sake of whole business we cannot do this. Often it is very important just to be present in the market as the provider of the service. Having two flights per day will allow us to offer the customers some choice when doing business with us. The best solution would be to accurately analyze the potentials of the evening flight, and, if we don not see the prospects of increasing number of passengers, to replace the aircraft for the evening flight with a smaller one, which will require less fuel, staff, and maintenance to operate.
To conclude the overall assessment of the potentials of operating the aforementioned flight I want to say that we must review the factors of the future growth / decrease in the demand for the service of the evening flight, prices for oil in world markets, and competitors strategies. I believe that having analyzed the above, we will come to the conclusion that the evening flight should be operated with a smaller aircraft, which can generate the attendance of at least 80 %.
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Research essay sample on Flights Per Day Conclusion That The Evening Flight Airline
