Kent Airlines are considering adding a newly discovered tropical island to their list of destinations. The island is 3,000 miles away in mid-Atlantic. The islanders have a potent drink called ‘OROS’ which they think will go down well in European markets and consequently are building a new international airport to expand the drinks and holiday business. The name of the island is Atlantis.
A group of eight managers has been gathered to decide whether the destination is viable, what type of aircraft to use and what profits might be expected.
You have 30 minutes to discuss the issue before the Marketing Director arrives to hear you put your case to him.
If you decide to go ahead then:
The team is:
We could probably make £10,000 profit per trip using a 747 for the transport of “OROS” and £8,000 using a Tristar in addition to passenger income.
We would need to station one overseas engineer permanently on Atlantis. We would also need to have spare parts such as tyres and engine components available there. We have a 747 available for a Thursday flight only and no other days, or a Tristar Series 200 available for a Saturday flight.
The costs of fuel, engineering, food for passengers, salaries, loading and unloading and refueling etc. would be £80,000 for a 747 and £65,000 for a Tristar.
FUTURES AUDIT MANAGER
The politics of island seem stable. The island will get enough money from selling “OROS” to pay for the building of the airport and hotels.
The island has an excellent climate and good beaches, but there is a lack of nightlife at present. There is great interest from both leisure and business customers in going to the island. A Saturday departure would give us sufficient demand for us to use a Boeing 747, but departures on other days would generate a much lower demand and make the Boeing unprofitable to use.
We would need to put on flights with special cheap rate tourist fares as well as the standard business fare, but using these we could probably generate £90,000 of income per trip using a 747 or £72,000 using a Tristar
MARKETING PLANNING MANAGER
This can be a profitable route looked at in both the short term and the long term.
The flight could depart at 21.00 hours on Saturday if an aircraft is available: this would be convenient for passengers and would also fit in with loading, catering and engineering staff.
BOEING 747 (Jumbo Jet)
On long haul routes where traffic levels are heavy, the 747 continues to be the mainstay of the fleet. Its exceptionally low fuel-consumption gives it a very low seat/mile costs.
TRISTAR SERIES 200
Routes: The Series 200 flies medium haul routes with heavy traffic.
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