Operational Management Final Case - Delay at Logan Airport

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We also calculate the percentage of the landing fee over the total revenue (appendix B). No matter what kind of plane is, increased in landing fee will have a stronger economic impact in terms of the total revenue. For example, the percentage of Turboprop increases from 6.69% to 11.15%, and the landing fee has a bigger impact on Turboprop than Regional and Conventional.

Landing Fee

Turboprop

Regional Jet

Conventional Jet

$150.00

6.69%

3.00%

0.38%

$200.00

8.92%

4.00%

0.51%

$250.00

11.15%

5.00%

0.64%

Table 3:Impact by landing fee on each type of plane

Moreover, the profitability analysis tables indicated below support our suggestion as well. Given the different choices of landing fee and arrival rate, profit per plane can be calculated (Appendix C for detailed calculations). Based on these data demonstrated in following 3 tables, PPP with a landing fee of $150 would cause highest profit per hour for each type of plane. Therefore, we believe the most effective landing fee chosen should be $150.

15 Seats Turboprop

Landing fee

Arrival rate

Delay (min)

Revenue/plane

Cost/plane

Profit/plane

Profit/hr

$0

59

60.5042

2242.5

658.76

1583.74

$93,440.38

$150

55

12.5217

2242.5

280.69

1961.81

$107,899.55

$200

45

4.5714

2242.5

249.76

1992.74

$89,673.4

$250

40

3.6

2242.5

289.20

1953.30

$78,132.14

50 Seats Regional Jets

Landing fee

Arrival rate

Delay (min)

Revenue/plane

Cost/plane

Profit/plane

Profit/hr

$0

59

60.5042

$5005

$1690.34

$3314.66

$195,565.17

$150

55

12.5217

$5005

$499.78

$4505.22

$247,787.24

$200

45

4.5714

$5005

$327.67

$4677.33

$210,479.65

$250

40

3.6

$5005

$350.58

$4654.43

$186,177

150 Seats Conventional Jets

Landing Fee

Arrival rate

Delay (min)

Revenue

Cost/plane

Profit/ Plane

Profit/Hr

$0

59

60.5042

$39195

$4641.42

$34553.57

$2,038,660.71

$150

55

12.5217

$39195

$860.14

$38334.86

$2,108,417.3

$200

45

4.5714

$39195

$550.58