Interviewer view · keep this screen to yourself
Starter: Rimal Air: profit on the Dubai to London route has almost gone
You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.
Case timer
00:00
1. Read the prompt aloud
Read it slowly, then pause. Let the candidate ask questions before they structure.
Rimal Air, a Gulf airline, made AED 80 million of profit on its Dubai to London route last year. This year the route made almost nothing. The exhibit shows the route's key figures. What happened, and what should Rimal Air do?
Format note: Difficulty: Starter. Format: interviewer-led, with an exhibit. Industry: Airlines. Region: UAE and UK. Interview length: about 25 minutes. The company is fictional and all figures are illustrative.
2. Answers to clarifying questions
Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.
If asked: Did the number of flights or the aircraft size change?
Answer: No, the same schedule, about 400,000 seats a year.
If asked: Did fares change?
Answer: The average one-way fare was flat at AED 2,000.
If asked: Did anything change in the market?
Answer: A rival started a new daily flight on the route this year.
3. The hypothesis a strong candidate states
Listen for an early, testable guess like this one. It does not need to match word for word.
Seats and fares are flat, so my hypothesis is that fewer passengers per flight (a lower load factor), likely because of the rival's new flight, drove most of the fall, with some cost increase on top.
4. A model structure
Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.
- Route profit = seats x load factor x fare - seats x cost per seat
- Key: Revenue: seats, load factor, fare
- Cost: cost per seat flown
- Market: the rival's new flight
Exhibit 1
Reveal to candidate: when they ask for this data, say "Open Exhibit 1" (they press "Show exhibit 1" on their screen).
| Measure | Last year | This year |
|---|---|---|
| Seats flown (a year) | 400,000 | 400,000 |
| Load factor (%) | 85 | 78 |
| Average one-way fare (AED) | 2,000 | 2,000 |
| Cost per seat flown (AED) | 1,500 | 1,550 |
So-what
Fares and seats did not change. Fewer seats were filled and each seat cost a little more to fly, which together wiped out the profit.
5. The working, step by step
Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.
Step 1: Revenue last year
What a strong candidate does: 400,000 seats, 85 percent full, AED 2,000 per passenger.
Revenue last year (AED): 400,000 × 0.85 × 2,000 = 680,000,000
Step 2: Revenue this year
What a strong candidate does: Same seats and fare, but only 78 percent full.
Revenue this year (AED): 400,000 × 0.78 × 2,000 = 624,000,000
Step 3: Profit last year
What a strong candidate does: Revenue minus 400,000 seats at AED 1,500 each.
Profit last year (AED): 400,000 × 0.85 × 2,000 - 400,000 × 1,500 = 80,000,000
Step 4: Profit this year
What a strong candidate does: Cost per seat rose to AED 1,550.
Profit this year (AED): 400,000 × 0.78 × 2,000 - 400,000 × 1,550 = 4,000,000
Step 5: Revenue effect
What a strong candidate does: The lower load factor alone.
Revenue effect (AED): (0.78 - 0.85) × 400,000 × 2,000 = -56,000,000
Step 6: Cost effect
What a strong candidate does: The higher cost per seat alone. Together with the revenue effect, this explains the AED 76 million fall.
Extra cost (AED): (1,550 - 1,500) × 400,000 = 20,000,000
Step 7: Curveball: how close to a loss?
What a strong candidate does: Interviewer: "The rival plans a second daily flight next year. How much room do we have?" The route breaks even when the share of seats filled equals cost per seat divided by fare.
Break-even load factor (%): 1,550 ÷ 2,000 × 100 = 77.5
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
Profit fell by AED 76 million, mostly because the route now fills fewer seats. First, the load factor fell from 85 to 78 percent after the rival's new flight, costing AED 56 million of revenue. Second, cost per seat rose AED 50, costing AED 20 million. Third, the route now breaks even at 77.5 percent full, so a second rival flight could push it into a loss. Rimal Air should fly smaller aircraft on quieter days to fill a higher share of seats, sharpen revenue management with more fare levels for early and late bookers, feed the route with connecting passengers from its network, and review fuel hedging and airport costs.
Risks a strong answer names: Smaller aircraft may lose premium-cabin revenue; The rival may cut fares, forcing a price response.
Next steps: Check load factor by day of week and cabin; Model a smaller aircraft on the four quietest days.
Strong versus weak
A strong answer
Split profit into revenue and cost, sized both effects, and used the break-even load factor to show how exposed the route is before the curveball.
A weak answer
Suggested cutting fares to win back passengers, without checking that the route is already close to a loss.
Score the candidate
Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.
Total
0 out of 25
Score all five criteria to see the band and the feedback template.