Site is Loading, Please wait...

Feedback for Activity 5 (increase in revenue)

The solution is to build the model without real life events and then factor the revenue and costs as appropriate to achieve a real-world model.  With the data laid out in a spreadsheet the model can quickly generate “what if” scenarios that provide accurate information for decision making.

Select 5 real life events that need to be factored into the model as either reducing revenue or adding costs, may include:

  • The average on time / delay statistics. Delayed flights lead to cancellations and compensation. An accurate model will assume these costs based upon historical data;
  • The fluctuations of the cost of fuel around the mean used in the model;
  • The increase in flying hours to route around Air Traffic Control Industrial Action or conflict zones;
  • Not achieving the expected load factors due to border closure / restrictions from pandemics, conflicts or industrial action;
  • The model must factor for inflation as costs will increase year on year. Any event that causes inflation to increase over the modelled inflation will increase costs and vice versa;

3 real life events where revenue can be increased, may include:

  • Major sporting events in the regions where the route departs and arrives from;
  • Significant annual religious events / gatherings or fiesta’s;
  • Reduction in competition on the route;
Post a comment

Leave a Comment