Q Why does average load factor increase when capacity decreases Load factor

Q why does average load factor increase when capacity

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Q) What is the largest cost category for most airlines? Q) Why does average load factor increase when capacity decreases? Load factor indicates the percentage of total capacity utilized by the airline. All airlines desire to achieve the highest load factor as possible. As it increases, revenue and profitability increases. Available seat miles (ASM) and load factor both increases the revenue passenger miles (RPM), hence increasing revenue. Therefore, when load factor increases, capacity decreases. Q) How does the EU Emissions Trading System affect airlines? In 2012, all EU airlines are required to purchase allowances for 1/3 of their emissions. This increases EU airline’s costs. EU airlines are greatly affected by the EU Emissions Trading System because they are in a competitive disadvantage to its non-EU competitors. Furthermore, to reduce cost, EU airlines have to amend its route and planning structure. Q) How do the cost of large and small capacity aircraft compare? Larger aircraft will automatically incur larger operating expenses. It incurs a higher fixed operating cost than a small capacity aircraft. This is because, larger aircraft will tend to accommodate more passengers and will travel further. This means that more fuel will be consumed and more labour hours and staffs will be needed to pay.
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  • Fall '16
  • Kelly Lawton
  • Generally Accepted Accounting Principles, Kyoto Protocol

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