Airline Occupancy Rates. Mathematics & Economics. Statistics Project
Airline Occupancy Rates
High airline occupancy rates on scheduled flights are essential to corporate profitability.
Suppose a scheduled flight must average at least 60% occupancy in order to be profitable.
The occupancy rate for random thirty 10:00 A.M. flights from Atlanta to Dallas is shown on Table 1. Do the occupancy data for thirty flights suggest that this scheduled flight is unprofitable?
Table 1: Occupancy Rate
flights Occupancy Rate flights Occupancy Rate
1 60% 16 60%
2 50% 17 20%
3 55% 18 60%
4 60% 19 50%
5 70% 21 40%
6 50% 21 50%
7 80% 22 40%
8 40% 23 60%
9 70% 24 80%
10 60% 25 40%
11 30% 26 80%
12 40% 27 70%
13 50% 28 90%
14 70% 29 60%
15 80% 30 90%
A. Project Description:
Building on the content learned in class on hypothesis testing, you are asked to demonstrate understanding by drawing a conclusion on a problem using hypothesis testing.
You need to state your hypothesis; find or gather data and/or problem from your academic discipline; analyze the data; and draw conclusion from the data.
B. Procedures and Steps:
1. Select a topic or an area of interest from your academic discipline and set up hypotheses that you want to test. You may either find an existing problem with data or test your hypothesis by collecting data.
Examples:
• Does airline A have more average customers during the week of the Thanksgiving holiday than airline B?
• Is the machine A producing more average daily outputs than machine B?
• Did the students in class A perform better as a result of the treatment?
• Suppose a scheduled flight must average at least 60% occupancy in order to be profitable, and the occupancy rate for one hundred 10:00 A.M. flights from NYC to Dallas Texas was examined. Is the mean occupancy per flight unprofitable?
2. Submit a report that includes the following
• A brief description of the area and/or topic of interest
• Existing problem with data or your own data with a data collection method
• Hypotheses
• Analyses
• Conclusion
Airline Occupancy Rates
Name:
Institutional Affiliation:
Airline Occupancy Rates
Introduction
Airline occupancy rates refer to the measurement of the capacity utilization that airlines use to determine their efficiency in filling seats and generating revenue. With the airlines having high fixed costs of operations, they depend on the sale of tickets to recover these costs.
Therefore, the occupancy rate is calculated by determining the ratio of passenger-kilometers to seat-kilometers on their routes. Passenger-kilometers refer to the total product of the number of flights, the entire length of the flights in kilometers, and the number of passengers on the flights. On the other hand, the seat-kilometers refer to the total product of the number of flights, the entire length of the flights in kilometers, and the number of available seats on those flights CITATION Ald15 \l 2057 (Alderighi, Nicolini, & Piga, 2015). Consequently, a larger occupancy rate translates to higher profitability for the airline.
Problem
Airlines strive to achieve profitability by maximizing their occupancy rates across different flights that they have available. While various airlines interpret the occupancy rate differently, a higher rate translates typically to increased profits for the airline.
High airline occupancy rates on scheduled flights are essential to corporate profitability. Suppose a scheduled flight must average at least 60% occupancy to be profitable. The occupancy rate for random thirty 10:00 A.M. flights from Atlanta to Dallas is shown in Table 1 below. The problem in this case thus is identifying whether the occupancy data for the thirty flights suggest that this scheduled flight is unprofitable. The assumption, in this case, is that profitability is possible only on an average of 60% occupancy rates of the flights run by the airline.
Table SEQ Table \* ARABIC 1: Sample Flight Occupancy Rates
Flight
Occupancy Rate (%)
Flight
Occupancy Rate (%)
1
60
16
60
2
50
17
20
3
55
18
60
4
60
19
50
5
70
20
40
6
50
21
50
7
80
22
40
8
40
23
60
9
70
24
80
10
60
25
40
11
30
26
80
12
40
27
70
13
50
28
90
14
70
29
60
15
80
30
90
The Table 1 above shows data from 30 random flights that ply the Atlanta to Dallas route of an airline. The occupancy rates are also described for each flight in percentage with the lowest being 20% and the highest at 90%. Therefore, the data is varied to show the different changes in the occupancy rates for the selected sample flight...
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