Question

Northeastern Airlines is a regional airline serving nine cities in the New England states as well as cities in New York, New Jersey, and Pennsylvania. While nonstop flights are available for some of the routes, connecting flights are often necessary. Northeastern Airlines Service Area The network shows the cities served and profit in U.S. dollars per passenger along each of these routes. The routes from ?Boston-to-Providence and from Providence-to-Boston make only $ 9 per passenger profit after all expenses. To service these cities, Northeastern operates a fleet of sixteen 122-passenger Embraer E-195 jets. These jets, which were first introduced by Embraer in late 2004, have helped Northeastern Airlines remain profitable for a number of years. However, in recent years, the profit margins have been falling, and Northeastern is facing the prospect of downsizing their operations. Management at Northeastern Airlines has considered several options to reduce cost and increase profitability. Due to Federal Aviation Administration regulations, the company must continue to serve each of the nine cities. How they serve these cities, however, is up to the management at Northeastern. One suggestion has been made to provide fewer direct flights, which would mean that a city served by Northeastern might only have direct flights to one other city. The company plans to hire a marketing analytics consultant to determine how demand would be impacted by longer flights with more connections, and to forecast the demand along each of the routes based on a modified flight operations map. Before hiring the consultant, the company would like to first determine the most profitable (on a profit per passenger basis) way to continue serving all of the cities.

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Answer 1

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