Question

The Wall Street Journal presented data suggesting that United Airlines was not covering its costs on flights from San Francisco to Washington D.C,. The article quoted analysts saying that United should discontinue this service. The costs per flight included the costs of fuel, pilots, attendants, food, etc. used on the flights. They also included shared costs associated with running the hubs at the two airports, such as ticket agents, building charges, baggage handlers, gate charges, etc. Suppose that the revenue collected on the typical United flight from San Francisco to Washington does not cover the costs. Does this fact imply that United should discontinue these flights? What could we learn from this case of study?

PLEASE ANSWER THE QUESTONS ACCORDING TO HOW THEY ARE WORDED! THANKS

Hints: 1) discus the differences between fixed costs and variable costs and how they could affect our decision-making.

2) What would consumers react if United airlines discontinued the service?

Answer 1

This is very intreintere question by the way because it is a question that is related with international difficulties so I want to say that it is a very dangerous situation when US decide to stop the airline service. Because of this situation they will have to face various types of conflict in the country and most importantly thing is that they can face a very high loss for their airlines. *And when US government stop the airline service that time people can do anything for their flights they can face various problems that time their reaction is so dangerous for US government because in the next year in US their is an election so they can suffer a very high loss so that these are the various customers reaction for their government.