AM414: Global Airline Management Fall Semester, 2020

Final Exam (60 Marks)

INSTRUCTIONS

This is an open book exam. You have 4-hours for this exam.

You need to download this paper and answer within the spaces provided. You MUST answer
on this question paper only. Once done, upload the completed paper as a word file (.docx)
using the Moodle Final Exam tool listed on top of the LMS page. Please use the following as
your File name:

“AM414 Final Exam Fall 2020 SecC – Amir Rehman F2018001016”

You will need to complete your exam and upload the file in word (.docx) format ONLY within
the exam time, so make sure you finish in good time.

Note: Turnitin anti-plagiarism software has been enabled. Answer all questions in your own
words by typing (hand written not acceptable). Copy/paste stuff will be severely penalized.
Please read and answer all the three questions.

Include diagrams where they may assist in your explanations. Please note no marks will be
awarded for including diagrams which are not fully explained and integrated in your response.

Write ONLY within the space provided in the question paper as that will only be marked.

There are 17 pages including this cover sheet.

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 AM414: Global Airline Management

Final Examination (60 Marks): Fall Semester, 2020

There are three questions in this exam, answer all (Q1=30marks; Q2=20marks; Q3=10marks).

Q1. Find the seat-km cost for a new route LHE(Lahore) – BKK (Bangkok) (30 marks, each sub
question (Q1 to Q12) carries 2 marks except the last question (Q13) which carries 6 marks)

One way: 4714 kilometers.

Estimated flight time is 4.5 hours.

 Find aircraft type

 thin route

 ATR / King Air/ 737-800 / 747-400 / 777-800

Qs1. Which aircraft will you select?

ANS: we will select 737-800

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  Route 4714 km

 ETOPS 60 min = 5000 km (use this as approx. long route if

diversion occurs)

 880 kph

Qs2. What is block time?

ANS: the block time is 5.681 hours

 Capital costs

 $80 million

 3500 block hours/year

 10%/year lease

 0.8% insurance/year

 Maintenance = $A1200/block hour

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Qs3. What is capital cost/block hour?

ANS: 80million*(10%+0.8%/3500)= 2468.5 per block hour

 Fuel Costs

 4000 kg/hour

 0.7 kg/litre

 US$ 0.55 / litre

Qs4. What is fuel cost/block hour

4000/0.7= 5714.28571 litre/hour

5714.28571*0.55= 3142.85714 per hour

3142.85714*5.681= 17854.5714 per block hour

 Crew Cost/Hour $900

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  Airport Cost/Hour $200

 E7nroute Cost/Hour $1,800

 Ground Handling Cost/Hour $250

 Freight Handling Cost/Hour $28

 174 seats (B737-800)

 65% LF

 Catering cost $50

Qs5. What is catering cost /block hour ?

174/100*65=113

113*50=5650

5650/5.6= 1008.9

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  Capital Cost/Hour US$ 2,122

 Maintenance Cost/Hour US$1,250

 Fuel Cost/Hour $3,901

 Crew Cost/Hour $900

 Airport Cost/Hour $255

 Enroute Cost/Hour $1,800

 Provisioning Cost/Hour $900

 Ground Handling Cost/Hour $250

 Freight Handling Cost/Hour $28

Qs6. What is Total Cost/Hour ?

Total Cost/hour= $11406

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Qs7. What is Total Cost/Seat-km) ?

(11406/5000/174 )= $0.0131

FARE CALCULATION

Qs8. What is Total Cost/Seat-km ? (capacity:174 seats)

(11406*4.5)/5000/174= $0.058

Qs9. What is Total Cost/Pax-km ? (@ 65% load factor)

(11406*4.5)5000/113= $0.0908

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Qs10. What is One way fare without indirect costs ?

5000*.09= 450

Qs11. What is Actual Fare with all costs one way? (Assume 30% of
fare as indirect cost)

450+135= $585

Qs12. What is Return Fare Cost to airline ?

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585*2= $1170

Qs13. What is Return Fare to be sold with 9% profit margin?

Profit margin= 9%
return fare= 1170
1170/1-0.09= 1285714$

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Q2. For the data provided below on Fleet Assignment, answer the four questions listed at the
end. (20 marks, each sub-question carries 5 marks)

Flight schedule, fares and passenger demands (Istanbul-Dubai-Lahore)

Flight no. From To Dep. time Arr. time Fare Demand

(PST) (PST) (US$)
(passengers)

EK401 DXB IST (5 Hrs) 1300 1800 $600 250

EK402 DXB IST 1400 1900 $600 250

EK403 DXB IST 1600 2100 $600 100

EK431 IST DXB 1000 1300 $600 150

EK432 IST DXB 1330 1830 $600 300

EK433 IST DXB 1600 2100 $600 150

EK601 DXB LHE(3 1400 1700 $300 150

HRS)

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 EK602 DXB LHE 1500 1800 $300 200

EK651 LHE DXB 1000 1300 $300 200

EK652 DXB LHE 1130 1430 $300 150

Fleet information
Fleet type No. of Capacity (seats) Per flight operating cost ($000)
aircraft owned DXB-IST DXB-LHE

A320-200 4 143 15 12

B737-800 4 174 16 13

B777-800 8 368 20 17

Profit ($000 per day)

Flight no. A320-200 B737-800 B777-800

EK401 10 15 25

EK402 10 15 25

EK403 5 3 1

EK431 10 15 10

EK432 10 15 25

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 EK433 10 15 10

EK601 30 35 40

EK602 30 35 40

EK651 30 35 40

EK652 30 35 40

Q2(a). Draw the Flight Network?

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Q2(b). Draw a Time-Space Network in the box below?

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Q2( c). Draw the Optimal Fleet Assignment Network which maximizes the profit (no need for
the aircraft to begin and end the day at same location)?

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 Q2(d). Calculate the Total Profit for the optimal fleet assignment above?

The overall profit which I calculated $80000 and one way was $20000 of boieng 777. from dubai to
istambul

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Q3. Airline decision makers lack decision supporting tools/models and as such do not have
much choice for decision options. Use of technology in airline management can provide
wonderful gains.

Note: This question carries 10 marks and relates to one of the chapters in your text book but
specifically asks you to explore database of journals ONLY in this area. Please provide proper
reference of the journal articles in-text and at the end. Copy/paste of internet material will
give you no marks.

Q3(a) Explain interactive decision-making tool/model used in Airline Planning and Operations
(2 marks).

Airlines are using AI (artificial intelligence) and data science technologies to predict the
future planning.

1.Airlines use AI and machine learning by using different algorithms to maximize the
profits remarkably by using factors like a pairing cities travelers prefer and by predicting
time of week they prefer and time which is feasible for most of the costumers.

2. airlines also use behavioral data such as travelers most searched destinations and using
data from online traveling agents and social media chatter to predict the traffic and plan
flights likewise.

3. airlines also use face detection and fingerprint detection systems to speed up their
operations.

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Q3(b). Select any one model/tool from your readings of journals and discuss how it can be
employed for better decision making by CEOs in any Pakistani Airline (PIA, Serene, Airblue) to
enhance airline performance (use internet to search databases for quality journal articles – no
google material will be graded. If any issues with internet, then use your knowledge as
discussed in the course) (8 marks).

PIA is offering premium administrations in Pakistan at this moment and it can utilize AI
advances since it has upper hand of offering more flights both homegrown and worldwide
flights and it is offering number of objections which different aircrafts in Pakistan aren't
advertising.

PIA can notice its potential costumers voyaging conduct and accumulate information from
various focuses like diverse online media stages and voyaging specialists and run
calculations to gauge the future significant objections and time and plan flights likewise.

The second model PIA can actualize is to convey unique mark scanners and use face ID to
give hustle free administrations to its clients with the goal that traveler can invest less

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energy on check in counters and boarding counters. Man-made reasoning and its
psychological advances that comprehend information can smooth out and robotize
examination, hardware upkeep, client assistance, just as numerous other inside cycles
and errands. Along these lines, AI innovations are helpful for different parts of carrier
activity the executives.

Reference List:

End of Exam

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