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The economics of one low-cost flight

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

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

An illustrative low-cost airline flies an Airbus A320 with 180 seats on a 1,000 km route. On one flight it carries 153 passengers. The average fare is USD 85 and each passenger spends USD 20 on extras. The airline's CASK is 8 US cents. What are the load factor, RASK, yield, profit on the flight, and the break-even load factor?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. 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.

Compare revenue per seat kilometre with cost per seat kilometre
- ASK = seats x km; RPK = passengers x km
- Revenue = passengers x (fare + extras)
- Cost = ASK x CASK

4. 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: ASK
What a strong candidate does: 180 seats x 1,000 km.
ASK: 180 × 1,000 = 180,000
Step 2: Load factor
What a strong candidate does: RPK of 153,000 divided by ASK.
Load factor (percent): 153 × 1,000 ÷ 180,000 × 100 = 85
Step 3: Revenue
What a strong candidate does: 153 passengers x USD 105.
Flight revenue (USD): 153 × (85 + 20) = 16,065
Step 4: RASK
What a strong candidate does: Revenue divided by ASK, in US cents.
RASK (US cents): 16,065 ÷ 180,000 × 100 = 8.92
Step 5: Yield
What a strong candidate does: Ticket revenue per RPK: the USD 85 fare over 1,000 km, in US cents.
Yield, fares only (US cents): 153 × 85 ÷ 153,000 × 100 = 8.5
Step 6: Total revenue per RPK
What a strong candidate does: Fares plus extras, per RPK, in US cents. This is the number to use for break-even.
Revenue per RPK (US cents): 16,065 ÷ 153,000 × 100 = 10.5
Step 7: Cost and profit
What a strong candidate does: Cost is 180,000 ASK x 8 cents = USD 14,400.
Flight profit (USD): 16,065 - 180,000 × 0.08 = 1,665
Step 8: Break-even load factor
What a strong candidate does: CASK divided by total revenue per RPK.
Break-even load factor (percent): 8 ÷ 10.5 × 100 = 76.19

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

The airline should keep flying this route but manage fares closely, because it earns about USD 1,665 per flight at an 85 percent load factor and breaks even at about 76 percent. First, that is only about 16 passengers of margin. Second, extras of USD 20 per passenger lift revenue per RPK to 10.5 cents against a CASK of 8 cents. The risk is a small fall in demand or rise in fuel cost, which can wipe out the profit. As a next step, track load factor and fares on this route every day.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.