Revenue = ticket revenue + revenue from additional sources

(1) Ticket revenue = # of flights * # of seats per plane * load factors * price per flight

(a) # of flights:
– increase # of flight to old destinations
– add new destinations
(b) # of seats per plane:
– more narrow space between rows
– less business-class rows
(c) load factor depends on:
– destination
– time schedule
– service level
– price
– promotion
– loyalty programs
(d) price:
– segment by customers/service level (business, coach, very coach)
– segment by time of purchase (how early on a ticket is purchased)
– segment by flight time convenience
– segment by destination (more popular, more expensive)
– segment by season (more expensive during Xmas)

(2) Additional Sources = food & beverages sales + duty free sales + additional services (book taxi/rent a car/book hotel via ariline site and charge %tage) + cargo