Re: Last year Ranger Airways' annual report showed an increase in the numb
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21 Dec 2022, 08:28
Last year Ranger Airways' annual report showed an increase in the number of revenue passenger miles (the total for all flights of the number of miles in each flight times the number of paying passengers in that flight). There were, however, declines in both the load factor-the percentage of available seats occupied- and the number of flights.
Which of the following, if true about Ranger Airways in the year reported on, would help most to resolve the apparent paradox between the increase in revenue passenger miles and the decreases in both load factor and number of flights?
A. The average passenger capacity of airplanes decreased.
B. The average length of flights increased.
C. There was an increase in the number of delays in both departures and arrivals.
D. There was an increase in the number of nonpaying passengers.
E. Many of the passenger fares became more expensive.
Revenue passenger miles, RPM = no. of flights(f) * no. of miles(m) * no. of paying passengers(pp)
Load factor = occupied seats / available seats i.e. 'pp' decreased.
As per passage RPM increased. and load factor & number of flights decreased. Price is not given so to get revenue it has to be multiplied to f, m and pp.
As we can see that one parameter i.e. 'm' is still left about which we don't know anything yet, so we need find about number of miles.
Among the options only B and E make some sense. A gives nothing new. C is irrelevant. D makes thing more complex.
E is open for it is using 'many' which can mean anything. It can have either a minimal effect or some effect.
B, on the other hand, average miles per flight increased. So, its quantum must be so much that it negates the two decreases to eventually increase RPM.
IMO Answer B.