Bunuel wrote:
Last year Ranger Airways' annual report showed an increase in the number of revenue passenger miles (the total for all flights of the number of miles in each flight times the number of paying passengers in that flight). There were, however, declines in both the load factor-the percentage of available seats occupied- and the number of flights.
Which of the following, if true about Ranger Airways in the year reported on, would help most to resolve the apparent paradox between the increase in revenue passenger miles and the decreases in both load factor and number of flights?
A. The average passenger capacity of airplanes decreased.
B. The average length of flights increased.
C. There was an increase in the number of delays in both departures and arrivals.
D. There was an increase in the number of nonpaying passengers.
E. Many of the passenger fares became more expensive.
CR16817
RPM = No of miles in flight1 * No of paying passengers in flight 1 + No of miles in flight2 * No of paying passengers in flight 2 + ... (all flights)
RPM has increased.
Load factor = Occupied seats/Available Seats * 100
Load factor has decreased.
No of flights has decreased.
This is the paradox - there are fewer flights and fewer paying passengers per flight (assuming the plane capacity hasn't increased suddenly because of new planes etc). Still RPM has increased. How is that? There is only one other factor that can change RPM and that is no of miles in each flight.
If the flights are getting longer, that could result in increased RPM inspite of fewer passengers and fewer flights.
That is answer (B). We need to explain how is it possible that RPM has increased inspite of fewer flights and passengers. Option (B) does that.