ZuoTi.Pro
Question

QUESTION 2 (10 marks) The cost of fuel is reported to be about 20% of the total operating cost for a major airline Events in

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

1) As a CEO of a major airline, one response will be to increase the fare of passengers. The second response will be to take forward cover to cover unexpected further rise in the fuel prices. The third response will be to look for alternate sources of jet fuel and enter into long term arrangements with the vendor at reduced prices.

2) The price rise will lead to less operating income / even losses. The major airlines would increase the fares to pass on the price rise to the passengers. Efforts will be taken to source jet fuel from alternate sources.

0 0
Add a comment
Know the answer?
Add Answer to:
QUESTION 2 (10 marks) The cost of fuel is reported to be about 20% of the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • MANAGERIAL CHALLENGE Why Charge $35 per Bag on Airline Flights? American Airlines (AA) announced that it...

    MANAGERIAL CHALLENGE Why Charge $35 per Bag on Airline Flights? American Airlines (AA) announced that it would immediately begin charging $35 per bag on all AA flights, not for extra luggage but for the first bag! Crude oil had crushed from $54 to $20 per barrel in the previous 3 months. AA’s new baggage policy applied to all ticketed passengers except first class and business class. On top of incremental airline charges for sandwiches and snacks introduced the previous year,...

  • Module 2: Learning Outcomes Homework Assignment

    Colonial Pipeline is a major oil pipeline system that transports refined oil (gasoline, diesel and jet fuel) from the US Gulf Coast to states mainly on the East Coast of the country. On May 7, 2021, Colonial Pipeline suffered a ransomware cyberattack that disrupted the distribution of refined oil products causing a massive shortage of oil to its East Coast markets. Assume that around the time of the ransomware cyberattack, a rebound of the US economy had caused a significant...

  • The performance measures/metrics used to assess organizational performance are many. The measures employed by managers must...

    The performance measures/metrics used to assess organizational performance are many. The measures employed by managers must be applicable/relevant and vary depending on certain issues. Once we are able to measure strategic initiatives, we can manage them. Listed below are three corporate-level strategies/initiatives discussed in class. For each corporate-level strategy/initiative listed below, offer three (3) performance measures relevant (i.e., especially meaningful) for monitoring the success of that particular strategy/initiative. Offer the measure and explain why it is especially relevant for that...

  • 22. Suppose that price is below the minimum average total cost (ATC) but above the minimum average variable cost (AVC) a...

    22. Suppose that price is below the minimum average total cost (ATC) but above the minimum average variable cost (AVC) and that the market price is expected to rise at least to ATC in the near future. In the short run, a firm that is a price-taker would: a. immediately shut down and get out of the industry. b. continue to produce a quantity of output such that its marginal revenue equals marginal cost. c. shut down temporarily, in hopes...

  • Question 2 (50 marks) Read the articles below. Airlines to seek MAHB compensation for delays, losses,...

    Question 2 (50 marks) Read the articles below. Airlines to seek MAHB compensation for delays, losses, Tuesday, 27 August 2019, by B.K Sidhu. PETALING JAYA: Airlines will be seeking compensation from airport operator MALAYSIA AIRPORTS HOLDINGS BHD (MAHB) after more than four days of disruptions and delays that caused the airline industry to lose tens of millions of ringgit. One airline CEO, who declined to be named, said the cost to his airline during the four days was easily over...

  • I would like an executive summary on this case study. Thank you! 73 CHAPTER 2 Fatalie...

    I would like an executive summary on this case study. Thank you! 73 CHAPTER 2 Fatalie The Identification of Opportunities and Theats Fiect the fer any re sich im es Closing Case Plane Wreck: The Airline Industry in 2001-2004 Between 2001 and 2003 players in the global line indos iets at the gate. As a result of such flexible work rules, try lost some $30 billion, more money than the industry Southwest needs only 80 employees to support and fly...

  • Question 1 (20 marks) The recent global outbreak of Covid-19 has major economic consequences. Using the...

    Question 1 (20 marks) The recent global outbreak of Covid-19 has major economic consequences. Using the AS-AD model, show what will be short-term impact of this crisis on the AIRLINE INDUSTRY Discuss some reasons why this impact may happen. b. Bank of Canada has already taken Fiscal and Monetary policy measures to stabilize the economy during the time of this outbreak. What actions has it take in terms of Fiscal Policy? In terms of Monetary Policy? (Provide specific details, Use...

  • a. Assuming number of miles flown is the only cost driver, determine the profitability for the...

    a. Assuming number of miles flown is the only cost driver, determine the profitability for the three flights selected. b. Using activity-based costing, choose an activity driver for each of the three activities and explain why you chose them. [Hint: Please provide three paragraphs, each explaining the activity driver you chose, the reasons why you chose it and the reasons why the other activity drivers were not as good as the one you chose.] Page 2 c. Using the activity...

  • Questions 1: 2 marks If only one airline serves a town, does a monopoly exist? What about competition from other services? Question 2: 3 marks Suppose that you are an orange grower. Would you expect the demand for your orange to be more elastic or more in

    Questions 1: 2 marks If only one airline serves a town, does a monopoly exist? What about competition from other services? Question 2: 3 marks Suppose that you are an orange grower. Would you expect the demand for your orange to be more elastic or more inelastic? Why? Question 3. 2 marks Mr Han Cook says that marginal cost is just a funny name for average total cost. What do you think about this idea? Question 4. 3 marks How...

  • Please read the case provided below and answer the following question: In 2007, JetBlue was a...

    Please read the case provided below and answer the following question: In 2007, JetBlue was a booming young airline with a strong reputation for outstanding service. In fact, the low-fare airline referred to itself as a customer service company that just happened to fly planes. But on Valentine's Day 2007, JetBlue was hit by the perfect storm-literally-of events that led to an operational meltdown. One of the most severe storms of the decade covered JetBlue's main hub at New York's...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT