VARIABLES

HOURS FLOWN
CHARTER PRICE/HR
TICKET PRICE/HR
CAPACITY
CHARTERED PROPORTION
OPERATING COST/ HR
INSURANCE
PROPORTION FINANCED
INTEREST RATE
PURCHASE PRICE

ORIGINAL PROJECTIONS
600
325
100
0.5
0.5
245
20000
0.4
0.115
87500

TOTAL REVENUE=
TOTAL COST=
TOTAL PROFIT=

172500
171025
1475

INVESTMENT
RATE OF RETURN=

52500
2.8

EAGLE AIRLINES
DATA

NAL PROJECTIONS

Scenario Summary
Current Values:

WORST CASE

REALISTIC

Changing Cells:
$B$5
800
600
900
$B$6
325
325
325
$B$7
100
100
100
$B$8
0.5
0.5
0.5
$B$9
0.5
0.5
0.5
$B$10
245
245
245
$B$11
20000
20000
20000
$B$12
0.4
0.4
0.4
$B$13
0.115
0.115
0.115
$B$14
87500
87500
87500
Result Cells:
$B$19
9975
1475
14225
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.

BEST CASE

1000
325
100
0.5
0.5
245
20000
0.4
0.115
87500
18475

Scenario Summary
Current Values:

WORST CASE

REALISTIC

Changing Cells:
$B$5
800
600
900
$B$6
325
300
325
$B$7
100
100
100
$B$8
0.5
0.5
0.5
$B$9
0.5
0.5
0.5
$B$10
245
245
245
$B$11
20000
20000
20000
$B$12
0.4
0.4
0.4
$B$13
0.115
0.115
0.115
$B$14
87500
87500
87500
Result Cells:
$B$19
9975
-6025
14225
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.

BEST CASE

1000
350
100
0.5
0.5
245
20000
0.4
0.115
87500
30975

Scenario Summary
Current Values:

WORST CASE

WORSE

Changing Cells:
$B$5
800
600
650
$B$6
325
325
325
$B$7
100
100
100
$B$8
0.5
0.5
0.5
$B$9
0.5
0.5
0.5
$B$10
245
245
245
$B$11
20000
20000
20000
$B$12
0.4
0.4
0.4
$B$13
0.115
0.115
0.115
$B$14
87500
87500
87500
Result Cells:
$B$19
9975
1475
3600
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.

NOT SO GOOD

725
325
100
0.5
0.5
245
20000
0.4
0.115
87500
6787.5

ABOVE AVERAGE

PRETTY GOOD

REALISTIC

BEST CASE

850
325
100
0.5
0.5
245
20000
0.4
0.115
87500

875
325
100
0.5
0.5
245
20000
0.4
0.115
87500

900
325
100
0.5
0.5
245
20000
0.4
0.115
87500

1000
350
100
0.5
0.5
245
20000
0.4
0.115
87500

12100

13162.5

14225

30975

Opportunity cost
60% of 87500 invested in market at 8% per annum
Option cost of $2500 at 8% per annum
Total cost=

4400

Profits vs hrs
35000
34200
I have taken the interest lost (opp cost) of $4300 into account.
33400
32600
So this graph tells us that the plane has to fly about 680 hours at least
31800
with all other variables held constant, in order to break even. That is
31000
30200
what the red dotted line shows.
29400
If you do not take the opportunity costs into account, wherever the line
28600
27800
crosses the x-axis is the breakeven point. In this case, it will be about 610
27000
26200
hours or so.
25400
24600
R = 0.853
23800
23000
22200
21400
20600
19800
19000
18200
17400
16600
15800
15000
14200
13400
12600
11800
11000
10200
9400
8600
7800
7000
6200
5400
4600
3800
3000
2200
1400
600
-200
-1000 500 525 550 575 600 625 650 675 700 725 750 775 800 825 850 875 900 925 950 975 1000 1025
-1800
-2600

Profits vs hrs
Linear (Profits vs hrs)