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Eagle Airlines Case - Low Hours Flown Charter Price per...

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Low Base High Hours Flown 500 800 1000 Charter Price per hour $300.00 $325.00 $350.00 Ticket Price per hour $95.00 $100.00 $108.00 Occupancy Rate on Scheduled Flights 40.00% 50.00% 60.00% % of Charter Flights 45.00% 50.00% 70.00% Operating Cost per Hour $230.00 $245.00 $260.00 Insurance $18,000.00 $20,000.00 $25,000.00 Proportion Financed 30.00% 40.00% 50.00% Interest Rate 10.50% 11.50% 13.00% Purchase Price $85,000.00 $87,500.00 $90,000.00 Revenue From Charters $67,500.00 $130,000.00 $245,000.00 Revenue From Scheduled Flight $52,250.00 $100,000.00 $97,200.00 Fixed Cost $20,677.50 $24,025.00 $30,850.00 Variable Cost $115,000.00 $196,000.00 $260,000.00 Using Low Values Using Base Values Using High Values Total Revenue $119,750.00 $230,000.00 $342,200.00 Total Cost $135,677.50 $220,025.00 $290,850.00 Total Profit -$15,927.50 $9,975.00 $51,350.00
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INPUT VARIABLES PROFIT MODEL Base Hours Flown 800 Base Charter Price per hour 325 Total Revenue $230,000.00 Ticket Price per hour 100 Total Cost $220,025.00 0.5 Total Profit $9,975.00 % of Charter Flights 0.5 245 Revenue From Charters $130,000.00 Insurance 20000 $100,000.00 Proportion Financed 0.4 Fixed Cost $24,025.00 Interest Rate 0.115 Variable Cost $196,000.00 Purchase Price 87500 Hours Flown LB 500 UB 1000 Intervals 20 Width 25 Hours Flown Profit $9,975.00 -37.50% 0 $500.00 -$2,775.00 -34.38% 1 $525.00 -$1,712.50 -31.25% 2 $550.00 -$650.00 -28.13% 3 $575.00 $412.50 -25.00% 4 $600.00 $1,475.00 -21.88% 5 $625.00 $2,537.50 -18.75% 6 $650.00 $3,600.00 -15.63% 7 $675.00 $4,662.50 -12.50% 8 $700.00 $5,725.00 -9.38% 9 $725.00 $6,787.50 -6.25% 10 $750.00 $7,850.00 -3.13% 11 $775.00 $8,912.50 0.00% 12 $800.00 $9,975.00 3.13% 13 $825.00 $11,037.50 6.25% 14 $850.00 $12,100.00 9.38% 15 $875.00 $13,162.50 12.50% 16 $900.00 $14,225.00 15.63% 17 $925.00 $15,287.50 18.75% 18 $950.00 $16,350.00 21.88% 19 $975.00 $17,412.50 25.00% 20 $1,000.00 $18,475.00 ### 4200 ### 4200 Occupancy Rate on Scheduled Flights Operating Cost per Hour Revenue From Scheduled Flight Percent Change from Base Case Value -50% -40% -30% -20% -10% 0% 10% 20% 30% -15000 -10000 -5000 0 5000 10000 15000 20000 25000 30000 35000 Sensitivity of Profit on Hours Flown (Keeping Everything Column D Column C Hours Flown Profit
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INPUT VARIABLES PROFIT MODEL Base Hours Flown 800 Base Charter Price per hour 325 Total Revenue $230,000.00 Ticket Price per hour 100 Total Cost $220,025.00 0.5 Total Profit $9,975.00
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