Each Tuesday, Ryan Airlines reduces its one-way ticket from Fort Wayne to Chicago from $136 to $25. To receive this special $25 price, the customer must buy a round-trip ticket. Ryan has a nonrefundable 20% penalty fare for cancellation; it estimates that about seven-tenths of 1% will cancel their reservations. The airline also estimates this special price will cause a passenger traffic increase from 400 to 900. Ryan expects revenue for the year to be 55.4% higher than the previous year. Last year, Ryan’s sales were $483,000. To receive the special rate, Janice Miller bought two round-trip tickets. On other airlines, Janice has paid $116 round trip (with no cancellation penalty).
a. Calculate the percent discount Ryan is offering.
Percent discount %
b. Calculate the percent passenger travel will increase.
Percent passenger travel %
c. Calculate the sales for new year.
Sales for new year $
d. Calculate Janice’s loss if she cancels one round-trip flight.
Janice’s loss $
e. Approximately how many more cancellations can Ryan Airlines expect (after Janice’s cancellation)? (Round down your answer to nearest whole number.)
No of cancellations people