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Because fuel prices are rising, the 'Efficient Airlines'

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Joined: 11 Jul 2016
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Concentration: General Management, Technology
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Because fuel prices are rising, the 'Efficient Airlines'  [#permalink]

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New post 20 Jan 2019, 06:47
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  25% (medium)

Question Stats:

82% (02:08) correct 18% (02:36) wrong based on 53 sessions

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Because fuel prices are rising, the 'Efficient Airlines' plans to maximize its profits by evoking its services to airports that are served by other leading airlines. However, on routes the 'Efficient Airlines' wants to operate it does not plan to reduce its frequency of flights, or impose further luggage restrictions. Experts feel, the plan, if implemented, is certain to increase the profits of the airlines.

Which of the following, if true, provides the strongest evidence that the contention of the experts is true ?

A.) Factors such as labor contracts, maintenance costs and fuel-hedging strategies play an important role in determining an airlines' profitability.

B.) passengers travelling by the 'Efficient Airlines' on popular routes are not happy with the service provided by the airlines.

C.) Many studies have reported that fuel prices alone may not be a sufficient driver of in-service efficiency across all airlines.

D.) The 'Efficient Airlines' offers more services to those airports that other airlines neglect, giving it more leverage to raise prices on such routes.

E.) The 'Efficient Airlines' is operating as efficiently as possible and there's not much room for improvement.
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Re: Because fuel prices are rising, the 'Efficient Airlines'  [#permalink]

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New post 20 Jan 2019, 16:14
What is the question source? There are a couple of mistakes in the text - please check if they are typos or from the source

Efficient airlines plans to cut back on routes due to fuel costs, but does not plan to reduce its frequency of flights, or impose further luggage restrictions.

Experts feel the profits of Efficient/all airlines(?) will increase. Support their position.

A.) Factors such as labor contracts, maintenance costs and fuel-hedging strategies play an important role in determining an airlines' profitability.
Doesn't say in the text how these are affected by fuel costs or by reducing routes. Could stretch and say that fuel-hedging strategies are easier with fewer routes. Out of scope but not rejected.

B.) passengers travelling by the 'Efficient Airlines' on popular routes are not happy with the service provided by the airlines.

Service doesn't mean profits. Cutting back on routes doesn't mean service improves. Out of scope and more out of scope than A.
A

C.) Many studies have reported that fuel prices alone may not be a sufficient driver of in-service efficiency across all airlines.
Alone. May not. These phrases make it far from definite, but either way this counters the position of the experts. We want to support.
A

D.) The 'Efficient Airlines' offers more services to those airports that other airlines neglect, giving it more leverage to raise prices on such routes.
...giving (Efficient Airlines) more leverage to raise prices on the routes it will maintain
Raising prices, with little competition, seems like a good way to increase profits. It's not a neon sign saying profits will increase, but it is, without stretching, evidence in support and thus better than A
D

E.) The 'Efficient Airlines' is operating as efficiently as possible and there's not much room for improvement.
If everything is efficient - service, backroom, pricing etc then it's difficult to raise prices. This supports profits not improving; we want to support profits improving.
D
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Re: Because fuel prices are rising, the 'Efficient Airlines'   [#permalink] 20 Jan 2019, 16:14
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Because fuel prices are rising, the 'Efficient Airlines'

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