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In an effort to increase revenues, Sky Air recently

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In an effort to increase revenues, Sky Air recently [#permalink] New post 11 Aug 2007, 05:25
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14. In an effort to increase revenues, Sky Air recently partnered with several airlines to create a joint frequent-flier program. In the new program, miles earned on all partner airlines can be combined for reward tickets valid on any airline in the partnership. Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect. Industry analysts doubt the CEO’s claim.

Which of the following, if true, best supports the analysts’ positions?
A. Air travel tends to be seasonal, with more passengers traveling during
warmer months and holiday periods.
B. The recent increase in passenger rates for all the partner airlines was
predicted by the lowest rates of air travel in the last decade.
C. Many travelers achieved reward tickets more quickly under the new
frequent-flier program and redeemed them recently for free travel.
D. Travelers redeemed frequent-flier rewards on Sky Air’s partners more
frequently than on Sky Air.
E. A study of frequent-flier programs showed that they generally result in
increased long-term airline revenues.

Folks, this question was already discussed in the post below but it did'nt closed to a convincing conclusion. Hence wish to revive it again.. Calling all CR gurus to comment..

http://www.gmatclub.com/phpbb/viewtopic ... hlight=air
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Re: CR : Sky Airlines [#permalink] New post 11 Aug 2007, 06:24
Amit05 wrote:
14. In an effort to increase revenues, Sky Air recently partnered with several airlines to create a joint frequent-flier program. In the new program, miles earned on all partner airlines can be combined for reward tickets valid on any airline in the partnership. Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect. Industry analysts doubt the CEO’s claim.

Which of the following, if true, best supports the analysts’ positions?
A. Air travel tends to be seasonal, with more passengers traveling during
warmer months and holiday periods.
B. The recent increase in passenger rates for all the partner airlines was
predicted by the lowest rates of air travel in the last decade.
C. Many travelers achieved reward tickets more quickly under the new
frequent-flier program and redeemed them recently for free travel.
D. Travelers redeemed frequent-flier rewards on Sky Air’s partners more
frequently than on Sky Air.
E. A study of frequent-flier programs showed that they generally result in
increased long-term airline revenues.

Folks, this question was already discussed in the post below but it did'nt closed to a convincing conclusion. Hence wish to revive it again.. Calling all CR gurus to comment..

http://www.gmatclub.com/phpbb/viewtopic ... hlight=air


I picked A as this shows another reason for the increase - I didn't agree with the OA :roll:

Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect.

The way I interpret D would be the correct answer is that it is implying that the other airlines is benefiting from the new program but this does not include Sky Air. This answer doesn't tell us explicitly that Sky Air is worse off than before the program. What if the program did help Sky Air increase number of passengers but rate not as high as the other airlines? The CEO's comment is still valid.
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Re: CR : Sky Airlines [#permalink] New post 11 Aug 2007, 06:49
Amit05 wrote:
14. In an effort to increase revenues, Sky Air recently partnered with several airlines to create a joint frequent-flier program. In the new program, miles earned on all partner airlines can be combined for reward tickets valid on any airline in the partnership. Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect. Industry analysts doubt the CEO’s claim.

Which of the following, if true, best supports the analysts’ positions?
A. Air travel tends to be seasonal, with more passengers traveling during
warmer months and holiday periods.
B. The recent increase in passenger rates for all the partner airlines was
predicted by the lowest rates of air travel in the last decade.
C. Many travelers achieved reward tickets more quickly under the new
frequent-flier program and redeemed them recently for free travel.
D. Travelers redeemed frequent-flier rewards on Sky Air’s partners more
frequently than on Sky Air.
E. A study of frequent-flier programs showed that they generally result in
increased long-term airline revenues.

Folks, this question was already discussed in the post below but it did'nt closed to a convincing conclusion. Hence wish to revive it again.. Calling all CR gurus to comment..

http://www.gmatclub.com/phpbb/viewtopic ... hlight=air


I am bit inclined towards B.


A. Air travel tends to be seasonal, with more passengers traveling during
warmer months and holiday periods.

How do we know that recent increase in the number of passengers has taken place during the warmer months and holiday periods??

B. The recent increase in passenger rates for all the partner airlines was
predicted by the lowest rates of air travel in the last decade.

Seems to be best choice in my opinion.
It actually shows that the recent increase in the passengers was already predicted whereas Sky Air has recently partnered with several airlines to increase the revenue.
So the increase in the passengers is not essentially the outcome of recent partnership.


C. Many travelers achieved reward tickets more quickly under the new
frequent-flier program and redeemed them recently for free travel.

It supports

D. Travelers redeemed frequent-flier rewards on Sky Air’s partners more
frequently than on Sky Air.

Supports the CEO's claim.

It's written that:

Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect.

Frequest-Flier program is for the all airlines and not just for Sky Air's.
D is saying that Travelers redeemed frequent-flier rewards on Sky Air’s partners more frequently than on Sky Air , it doesn't mean that travelers have not redeemed rewards on Sky Air's. There may have been some increase in the no of travelers on Sky Air's also.
So overall the motive of new program is acheived, which supports the CEO's claim.


E. A study of frequent-flier programs showed that they generally result in
increased long-term airline revenues.

Supports the CEO's claim.

- Brajesh
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Re: CR : Sky Airlines [#permalink] New post 11 Aug 2007, 06:53
beckee529 wrote:
Amit05 wrote:
14. In an effort to increase revenues, Sky Air recently partnered with several airlines to create a joint frequent-flier program. In the new program, miles earned on all partner airlines can be combined for reward tickets valid on any airline in the partnership. Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect. Industry analysts doubt the CEO’s claim.

Which of the following, if true, best supports the analysts’ positions?
A. Air travel tends to be seasonal, with more passengers traveling during
warmer months and holiday periods.
B. The recent increase in passenger rates for all the partner airlines was
predicted by the lowest rates of air travel in the last decade.
C. Many travelers achieved reward tickets more quickly under the new
frequent-flier program and redeemed them recently for free travel.
D. Travelers redeemed frequent-flier rewards on Sky Air’s partners more
frequently than on Sky Air.
E. A study of frequent-flier programs showed that they generally result in
increased long-term airline revenues.

Folks, this question was already discussed in the post below but it did'nt closed to a convincing conclusion. Hence wish to revive it again.. Calling all CR gurus to comment..

http://www.gmatclub.com/phpbb/viewtopic ... hlight=air


I picked A as this shows another reason for the increase - I didn't agree with the OA :roll:

Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect.

The way I interpret D would be the correct answer is that it is implying that the other airlines is benefiting from the new program but this does not include Sky Air. This answer doesn't tell us explicitly that Sky Air is worse off than before the program. What if the program did help Sky Air increase number of passengers but rate not as high as the other airlines? The CEO's comment is still valid.


beckee529, I too had similar doubts but after looking at the post referred, I thought 1 explanation is right.
we need to look at it this way :
What is the desired effect ? - >>> Increased revenue.
What does the airline do to increase the revenue ? >>> Devices a new freq-flier program with other air-lines.
What does the program result into ? >>> Increased passengers.
Does this increase revenue for Sky Air ? >>>> Don't know.

The CEO says the passengers have increased. But does this answers the last question. Any choice that answers the last Q in negative will win.
Lets look at the options:
A) It does does answers whether revenue increased or not. There is no mention of time. Neither are measuring the revenue for a specified time.

B) (I choose this option) Even this does not answers the last Q. Increase in passengers does not necessarily mean increase in revenue for since other partners might be getting more share. And since the prices are low, volume should be high to generate an increase in revenue.

C) Irrelevant.

D) May be yes. Travelers preferred other partners more frequently than Sky. Hence a larger proportion of the increase in passengers might have benefited the partners more. Hence the program might not have had the desired effect.

E) Out of scope.

The questions you raised about CEO's point is valid. But what we need to find out is why Analysts do not agree with the CEO. D gives them the strongest reason as compared to other options.
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Re: CR : Sky Airlines [#permalink] New post 11 Aug 2007, 07:59
Amit05 wrote:
beckee529 wrote:
Amit05 wrote:
14. In an effort to increase revenues, Sky Air recently partnered with several airlines to create a joint frequent-flier program. In the new program, miles earned on all partner airlines can be combined for reward tickets valid on any airline in the partnership. Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect. Industry analysts doubt the CEO’s claim.

Which of the following, if true, best supports the analysts’ positions?
A. Air travel tends to be seasonal, with more passengers traveling during
warmer months and holiday periods.
B. The recent increase in passenger rates for all the partner airlines was
predicted by the lowest rates of air travel in the last decade.
C. Many travelers achieved reward tickets more quickly under the new
frequent-flier program and redeemed them recently for free travel.
D. Travelers redeemed frequent-flier rewards on Sky Air’s partners more
frequently than on Sky Air.
E. A study of frequent-flier programs showed that they generally result in
increased long-term airline revenues.

Folks, this question was already discussed in the post below but it did'nt closed to a convincing conclusion. Hence wish to revive it again.. Calling all CR gurus to comment..

http://www.gmatclub.com/phpbb/viewtopic ... hlight=air


I picked A as this shows another reason for the increase - I didn't agree with the OA :roll:

Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect.

The way I interpret D would be the correct answer is that it is implying that the other airlines is benefiting from the new program but this does not include Sky Air. This answer doesn't tell us explicitly that Sky Air is worse off than before the program. What if the program did help Sky Air increase number of passengers but rate not as high as the other airlines? The CEO's comment is still valid.


beckee529, I too had similar doubts but after looking at the post referred, I thought 1 explanation is right.
we need to look at it this way :
What is the desired effect ? - >>> Increased revenue.
What does the airline do to increase the revenue ? >>> Devices a new freq-flier program with other air-lines.
What does the program result into ? >>> Increased passengers.
Does this increase revenue for Sky Air ? >>>> Don't know.

The CEO says the passengers have increased. But does this answers the last question. Any choice that answers the last Q in negative will win.
Lets look at the options:
A) It does does answers whether revenue increased or not. There is no mention of time. Neither are measuring the revenue for a specified time.

B) (I choose this option) Even this does not answers the last Q. Increase in passengers does not necessarily mean increase in revenue for since other partners might be getting more share. And since the prices are low, volume should be high to generate an increase in revenue.

C) Irrelevant.

D) May be yes. Travelers preferred other partners more frequently than Sky. Hence a larger proportion of the increase in passengers might have benefited the partners more. Hence the program might not have had the desired effect.

E) Out of scope.

The questions you raised about CEO's point is valid. But what we need to find out is why Analysts do not agree with the CEO. D gives them the strongest reason as compared to other options.


good points, I can see how B would be a stronger answer than A. :o However, I still cannot reason how D is the OA without assuming more than what is mentioned in the passage.
taken from the passage: "In the new program, miles earned on all partner airlines can be combined for reward tickets valid on any airline in the partnership." What if passengers are choosing to fly with Sky Air and then redeeming their rewards with the other airlines? Couldn't that be a possibility? So in this case, D would be supporting the CEO's claims. Anybody else?
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Re: CR : Sky Airlines [#permalink] New post 13 Aug 2007, 20:56
beckee529 wrote:
Amit05 wrote:
beckee529 wrote:
Amit05 wrote:
14. In an effort to increase revenues, Sky Air recently partnered with several airlines to create a joint frequent-flier program. In the new program, miles earned on all partner airlines can be combined for reward tickets valid on any airline in the partnership. Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect. Industry analysts doubt the CEO’s claim.

Which of the following, if true, best supports the analysts’ positions?
A. Air travel tends to be seasonal, with more passengers traveling during
warmer months and holiday periods.
B. The recent increase in passenger rates for all the partner airlines was
predicted by the lowest rates of air travel in the last decade.
C. Many travelers achieved reward tickets more quickly under the new
frequent-flier program and redeemed them recently for free travel.
D. Travelers redeemed frequent-flier rewards on Sky Air’s partners more
frequently than on Sky Air.
E. A study of frequent-flier programs showed that they generally result in
increased long-term airline revenues.

Folks, this question was already discussed in the post below but it did'nt closed to a convincing conclusion. Hence wish to revive it again.. Calling all CR gurus to comment..

http://www.gmatclub.com/phpbb/viewtopic ... hlight=air


I picked A as this shows another reason for the increase - I didn't agree with the OA :roll:

Sky Air’s CEO cites a recent increase in the number of passengers on all the partner airlines as evidence that the new frequent-flier program is having the desired effect.

The way I interpret D would be the correct answer is that it is implying that the other airlines is benefiting from the new program but this does not include Sky Air. This answer doesn't tell us explicitly that Sky Air is worse off than before the program. What if the program did help Sky Air increase number of passengers but rate not as high as the other airlines? The CEO's comment is still valid.


beckee529, I too had similar doubts but after looking at the post referred, I thought 1 explanation is right.
we need to look at it this way :
What is the desired effect ? - >>> Increased revenue.
What does the airline do to increase the revenue ? >>> Devices a new freq-flier program with other air-lines.
What does the program result into ? >>> Increased passengers.
Does this increase revenue for Sky Air ? >>>> Don't know.

The CEO says the passengers have increased. But does this answers the last question. Any choice that answers the last Q in negative will win.
Lets look at the options:
A) It does does answers whether revenue increased or not. There is no mention of time. Neither are measuring the revenue for a specified time.

B) (I choose this option) Even this does not answers the last Q. Increase in passengers does not necessarily mean increase in revenue for since other partners might be getting more share. And since the prices are low, volume should be high to generate an increase in revenue.

C) Irrelevant.

D) May be yes. Travelers preferred other partners more frequently than Sky. Hence a larger proportion of the increase in passengers might have benefited the partners more. Hence the program might not have had the desired effect.

E) Out of scope.

The questions you raised about CEO's point is valid. But what we need to find out is why Analysts do not agree with the CEO. D gives them the strongest reason as compared to other options.


good points, I can see how B would be a stronger answer than A. :o However, I still cannot reason how D is the OA without assuming more than what is mentioned in the passage.
taken from the passage: "In the new program, miles earned on all partner airlines can be combined for reward tickets valid on any airline in the partnership." What if passengers are choosing to fly with Sky Air and then redeeming their rewards with the other airlines? Couldn't that be a possibility? So in this case, D would be supporting the CEO's claims. Anybody else?


Passengers prefer other airlines to redeem their vouchers, may be because of quality of service. If that is the case so then why would they prefer to pay for traveling on Sky Air.. You can take it this way... If given a choice, travelers prefer other Airlines more than sky Air for whatever reason which is proved by D. We are not given anything about travelers who pay and travel and how much proportion of it travel in sky. So it would incorrect to assume any thing out of it..
In other words even for vouchers tickets passengers prefer other airlines, why would they pay and travel by Sky ..? And the swelling number would be coz of other airlines..
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[#permalink] New post 14 Aug 2007, 19:50
I think its D. am i missing something here? this seems really clear that it is D. What is the OA answer?

These CR questions put in alot of extraneous information to throw you off, including in the different answers. Just extract what it is getting at. Sky air implemented program to increase THEIR revenue. CEO then cites increased air travel on OTHER AIRWAYS to cite program is effective. Program is ONLY effective if it increases THEIR REVENUE.

A. Air travel tends to be seasonal, with more passengers traveling during
warmer months and holiday periods.

(Nothing to do with refuting CEO's claim. ANd geez, where does it mention anything about what season it is in the statement?)

B. The recent increase in passenger rates for all the partner airlines was
predicted by the lowest rates of air travel in the last decade.
(Huh, I get halfway through this and cross it off. Off on another path...)

C. Many travelers achieved reward tickets more quickly under the new
frequent-flier program and redeemed them recently for free travel.
(Again, bla bla bla bla, nothing to do with what we are looking for)

D. Travelers redeemed frequent-flier rewards on Sky Air’s partners more
frequently than on Sky Air.
(Bingo. Evidence to support analysists claim, that hell, perhaps Sky Air is not reaping the rewards, but the other guys are. Frequently is a nebulous definition, certainly not quantifiably, its not meant to hang you up on it, the gist is important, the other guys are benefiting more than sky air. hell, for all we know it costs sky air 20 billion dollars to implement this program, and unless they get a certain increase in travel to offset cost it hurts them. so dont get caught up in a numbers game.)

E. A study of frequent-flier programs showed that they generally result in
increased long-term airline revenues.
(supports CEO)


D.

Now i must look like an idiot if OA is not D.
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 [#permalink] New post 15 Aug 2007, 08:11
Still its tough to say the answer is D...B stands as a contender.

The conclusion is that the program increases Sky air's revenues(first sentence).

So,D would have to make lots of assumptions to be true...B is much better.
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 [#permalink] New post 16 Aug 2007, 01:59
what is the source of the question?
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Re: CR : Sky Airlines [#permalink] New post 18 Aug 2007, 18:52
I went with D too.

Basically analyst says that partnering with frequent filer program resulted in increased revenue. One way to get that is if people use this airlines to gain points. The impact on the revenue would be much better if the use of these miles are done on some other airlines, because when passengers use the miles .. they don't pay .. its a discount they get.. and if that discount is given by some other airlines and they use the Sky to earn those discount points its great for the Sky Air revenue. D says that passengers use other airlines to redeem the miles.. hence supporting the analysis.
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 [#permalink] New post 18 Aug 2007, 18:57
I think its D. None of the other options give us the answer.
CEO says program is a success( success means sky air's revenue increases). But most of the paasengers are travlling on partner airlines..not on Sky.

So, CEO is wrong and the program is not a success.
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 [#permalink] New post 18 Aug 2007, 19:14
cruiser wrote:
I think its D. None of the other options give us the answer.
CEO says program is a success( success means sky air's revenue increases). But most of the paasengers are travlling on partner airlines..not on Sky.

So, CEO is wrong and the program is not a success.


Gud explanation cruiser....
Will go for D....
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 [#permalink] New post 18 Aug 2007, 21:47
Well I do think that this question is slightly flawed in that it does not provide enough information...there is no implicit indication of what a "success" means. We are to assume that it is an increase of revenues.

In this case D is a very revealing answer as it illustrates that consumers are much more likely to fly on competitors airlines. What it really shows is that Sky Air is not very well liked, and that consumers are pleased that they can use their points on a competitors airline.
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 [#permalink] New post 19 Aug 2007, 02:13
I am going with D. It talks about SKY not getting the FF miles. What is the OA?
  [#permalink] 19 Aug 2007, 02:13
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