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"Several airlines have recently intensified..."

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"Several airlines have recently intensified..." [#permalink] New post 12 Oct 2010, 20:57
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Question Stats:

79% (02:15) correct 21% (00:22) wrong based on 29 sessions
Could anyone explain the answer to this one:

Several airlines have recently intensified their fierce competition for business by offering tickets that, if purchased 2 days in advance, cost as much as 40 percent less than the heretofore lowest-priced “super-saver” tickets, which require a 30-day advance purchase. The airlines’ long-term gains from tickets bought under this new plan will be enormous because, unlike earlier discount tickets, these are not refundable.
The author assumes which of the following about discounted airline tickets in predicting long-term gains in airline revenue?
(A) More discounted, advance purchase tickets are purchased than are actually used.
(B) Tickets requiring 30-day advance purchase are not profitable for airlines.
(C) Few business travelers have taken advantage of 30-day advance purchase tickets.
(D) Airlines will have to discontinue offering 30-day advance purchase tickets when they begin offering 2-day advance purchase tickets.
(E) The majority of the 2-day advance purchase tickets offered by a given airline will be sold to passengers who have not previously flown on that airline.
[Reveal] Spoiler: OA
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Re: "Several airlines have recently intensified..." [#permalink] New post 13 Oct 2010, 02:51
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Several airlines have recently intensified their fierce competition for business by offering tickets that, if purchased 2 days in advance, cost as much as 40 percent less than the heretofore lowest-priced “super-saver” tickets, which require a 30-day advance purchase. The airlines’ long-term gains from tickets bought under this new plan will be enormous because, unlike earlier discount tickets, these are not refundable.

The above statements say that more people purchase tickets in advance. The passage assumes that lots of these tickets go unused. So the airlines gains from these unused tickets because they are not refundable. Any statement which states that the tickets are not used would be the right answer.

The author assumes which of the following about discounted airline tickets in predicting long-term gains in airline revenue?
(A) More discounted, advance purchase tickets are purchased than are actually used.
This statements mentions that the tickets are not used. hence this is the right answer.

(B) Tickets requiring 30-day advance purchase are not profitable for airlines.
Passage is not concerned whether the 30 -day advance purchase is profitable or not.

(C) Few business travelers have taken advantage of 30-day advance purchase tickets.
Not mentioned and irrelevant. Even if they take advantage of the advance tickets it is not profitable for the airlines in terms of revenue.

(D) Airlines will have to discontinue offering 30-day advance purchase tickets when they begin offering 2-day advance purchase tickets.
This is a consequence of the conclusion. Not an assumption.

(E) The majority of the 2-day advance purchase tickets offered by a given airline will be sold to passengers who have not previously flown on that airline.
Not an assumption and totally irrelevant.
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Re: "Several airlines have recently intensified..." [#permalink] New post 12 Oct 2010, 21:15
Straight A.
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Re: "Several airlines have recently intensified..." [#permalink] New post 13 Oct 2010, 02:21
Straight A.

Reasons:
On Negating the Option A the premise does not hold.

This is because if Less tickets are used then most of the purchased tickets are refunded and the Planes are flying with empty seats leading to loss in revenue.
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Re: "Several airlines have recently intensified..." [#permalink] New post 13 Oct 2010, 03:21
A clearly....
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Re-taking GMAT. Hope the charm works this time.. :)

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Re: "Several airlines have recently intensified..." [#permalink] New post 13 Oct 2010, 07:12
its A
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Re: "Several airlines have recently intensified..." [#permalink] New post 13 Oct 2010, 07:28
not used ---> non refundable ----> enormous gain :)
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Re: "Several airlines have recently intensified..." [#permalink] New post 15 Oct 2010, 14:36
Thanks for the help guys.
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Re: "Several airlines have recently intensified..." [#permalink] New post 16 Nov 2010, 12:29
A... more bought less used...more revenue.
Re: "Several airlines have recently intensified..."   [#permalink] 16 Nov 2010, 12:29
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