Chapter 11, Problem 11.2C

Break-even sales, contribution margin
"Every airline has what is called a break-even load factor. Thai is. the percentage of scats the airline . . . (flies) . . . that it must sell ... to cover its costs. Since revenue and costs vary from one airline to another, so does the break-even factor. . . . Overall, the break-even load factor for the (airline) industry in recent years has been approximately 66 percent."
The airline industry is notorious for boom and bust cycles. Why is airline profitability very sensitive to these cycles? Do you think that during a down cycle the strategy' to consolidate routes and raise ticket prices is reasonable? What would nuke this strategy succeed or fail? Why? Source:

http://www.avjobs.coni/history/airline-economics.asp.