1% increase via a fare rise equates to $36 million.
If only it was that simple. You have not mentioned that the airline also incurs cost increases across supply chain, services, infrastructure etc. Inflation is a reality for the expense bill of the airline that needs to also be considered in your 'calculation'.
Furthermore - increasing airfares creates its own problems. And that comes from the consumer and their sensitivity. The low-cost consumer (who is sensitive to the macroeconomic environment) in economic terms is 'unit elastic demand'. Putting up fares will see a decline in consumer uptake since leisure travel is discretionary. It won't work.
Last edited by PPRuNeUser0198; 3rd Jan 2020 at 08:06.