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The cost per seat-mile on a major U.S. airline is 24.1 cents. In order to estimate the cost of flying a passenger from Pensacola, FL, to Denver, CO, we should multiply 1,184 miles by 24.1 cents. ◦Do you agree or disagree? Explain your reasoning. The cost per seat mile is calculated by taking all the airline’s operating expenses and dividing it by the total number of available seat miles produced. Since sometimes the fuel or transportation expenses are withheld, the total estimate will not be very accurate. If the 24.1 cents took variable costs into consideration, then yes, I would agree. ◦What would you suggest to estimate the cost of a flight? The estimate would be 1,184 miles multiplied by 24.1 cents which comes out to $285.34. This number may need to add any fees, like fuel, not taken into consideration. Reference: Airline Data Project, (n.d.). Glossary. Global Airline Industry Program. MIT. Retrieved from http://web.mit.edu/airlinedata/www/Res_Glossary.html
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