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# In an effort to increase revenues, Sky Air recently

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Director
Joined: 07 Nov 2004
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In an effort to increase revenues, Sky Air recently [#permalink]

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04 Jan 2005, 15:13
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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 Airâ€™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 CEOâ€™s claim.

Which of the following, if true, best supports the analystsâ€™ position?

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 preceded 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 Airâ€™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.

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Manager
Joined: 02 Dec 2004
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04 Jan 2005, 15:48
I would go with A, which offers an alternative explanation. Seasonal trend explains the surge in passenger.

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VP
Joined: 30 Sep 2004
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04 Jan 2005, 15:53
between A and B ! i choose B !

a. we dont know wether the increase happens during warmer months or holiday periods

b. the increase was preceded by very low rates. therefore the increase that already happened was due to the very low rates at that time.

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Director
Joined: 29 Oct 2004
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04 Jan 2005, 17:10
(A)
lower rate does not mean more passenger.

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Director
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04 Jan 2005, 17:50
OA is D.

This was a very tricky one. I picked A too

But once you know the OA it makes sense. D says that passengers redeemed their reward tickets with Sky Airâ€™s partners. This implies that given a choice they prefer the partner airlines over Sky Air.

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Director
Joined: 25 Jan 2004
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04 Jan 2005, 20:47
gayathri wrote:
OA is D.

This was a very tricky one. I picked A too

But once you know the OA it makes sense. D says that passengers redeemed their reward tickets with Sky Airâ€™s partners. This implies that given a choice they prefer the partner airlines over Sky Air.

hmm ... I doubt the OA because CEO claims
"a recent increase in the number of passengers on all the partner airlines"

so his claim is still valid. Had he claimed Sky Airâ€™s increased its number of passengers then it is a different story.

gayathri would you mind sharing the source of this question?
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Praveen

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Director
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04 Jan 2005, 20:55
Praveen, this is from a PR handout that a friend passed on to me. It does not have any explanations

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Director
Joined: 21 Sep 2004
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04 Jan 2005, 20:56
I think D makes the most sense in this case because they are talking about partnership bringing out the desired effects..

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Director
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04 Jan 2005, 20:56
I find it hard to believe OA is D
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Praveen

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Senior Manager
Joined: 19 Nov 2004
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05 Jan 2005, 03:45
Following the line of argument:

The passage starts off with "In an effort to increase revenues..." and later goes on to quote the CEO of SKY air in "...as evidence that the new frequent-flier program is having the desired effect.."

The desired effect is the increase in SKY's revenue figures and the CEO claims that it is increasing because of the frequent flier program. However, the analysts think otherwise. Now, there is a very thin line here - a classic trick. What do the analysts think otherwise about? (a) Whether or not he frequent flier program is helping the partnership or (b) Whether or not the revenue of SKY is increasing?

Since the original intention was to increase SKY's revenue, D is the only argument which leads us to think that in spite of the fact that the number of passengers has increased, there has been no direct impact on SKY's revenue because "Travelers redeemed frequent-flier rewards on Sky Airâ€™s partners more frequently than on Sky Air."

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Director
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05 Jan 2005, 06:04
This question is very vague. If it said like this in the beginning, I probably got it right.

In an effort to its increase revenues, Sky Air recently partnered ...

Without "its", I could say "revenues" are for all the partners, not only for Sky Air.

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VP
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05 Jan 2005, 12:50
I would have chosen "D" if the stem had said

"Sky Airâ€™s CEO cites a recent increase in the number of passengers on all the partner airlines [b]Combined [/b] as evidence".

Other than combined it was confusing whether CEO was only refering to increase in passengers in the entire group or increase in each partner airlines.

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05 Jan 2005, 12:50
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# In an effort to increase revenues, Sky Air recently

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