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Re: Several airlines have recently intensified their fierce [#permalink]
IMO A..

below is the reasoning

A. More discounted, advance purchase tickets are purchased than are actually used.- This explains why the gains from the new Plan will be enourmous. More Discounted--> More Tickets Purchsed--> More Probability of Ticket Cancellations due to short period of 2 days-->So more tickets Purached than actully used..and since these tickets are non-refundable the gain is more to Airline


B. Tickets requring 30day advance purchase are not profitable for airlines.-This Doenst explain why the gains from the new plan will be more.

C. Few business travelers have taken advance of 30day advance purchase tickets - Irrelevent

D. Airlines will have to discontinue offering 30day advance purchase tickets when they begin offering 2-day advance purchase tickets. -This Doesnt lead tho the Conclusion

E. The majority of the 2 day advance purchase tickets offered by a given airline will be sold to passengers who have not previous flown on that airline.- Out of Scope

ykaiim.. Please post the OA
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Re: Several airlines have recently intensified their fierce [#permalink]
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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 their fierce [#permalink]
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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 their fierce [#permalink]
jgomey wrote:
Several airlines have recently intensified their fierce competition for business by offering tickets that, if purchased 2 days in advance, cost as much 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 tickets, 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.

Source: GMAC Paper test #42, Section 7, Question #3.



Good one;
Answer A, there was confusion between C and B. The B option 30-day advance purchase are not profitable for airlines; They are not profitable thats way the airlines have introduced 2 day adv. purc. tickets. So its wrong. Option C - if few passengers purchased that 30 day adv. pur. tic. then it will weaken the argument conclusion. Option A is also controversial; but you can guess, since few tickets are used hence the airline needs to refund the amount of unused / not needed tickets to customers. The new tickets are non- refundable - will make profits as long term gain.

:banana
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Re: Several airlines have recently intensified their fierce [#permalink]
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Advance Purchase Tickets are refundable and hence not profitable.
So, its Simply A.. :-D

Thanks.
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Re: Several airlines have recently intensified their fierce [#permalink]
GMATNinja gmat1393 GMATNinjaTwo nightblade354

Can anyone explain why option 'A' is correct?
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Several airlines have recently intensified their fierce [#permalink]
Quote:
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.
Like Choice (C), this answer choice uses language that sounds like growth. And like Choice (C), this choice doesn't give us any logical explanation for the long-term revenue growth that we care about.


Despite the fact that I can understand why (A) will work, would you please critique my following interpretation?

The majority of the 2-day advance purchase tickets will be sold to passengers who have not previously flown on that airline New customer New Rev flow ↑ Revenue
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