Instructions

Read the following passage and answer the questions that follow.

In calendar year 2008, there was turbulence in the air as Jet Airways' Chairman pondered what course of action the airline should take. Air India was also struggling with the same dilemma. Two of India's largest airlines, Air India and Jet Airways, had sounded caution on their fiscal health due to mounting operational costs. A daily operational loss of $2 million (Rs 8.6 crore) had in fact forced Jet Airways to put its employees on alert. Jet's senior General Manager had termed the situation as grave. Jet's current losses were$2 million a day (including Jet-Lite). The current rate of Jet Airways' domestic losses was $0.5 million (Rs 2.15 crore) and that of JetLite was another$0.5 million. International business was losing over \$1 million (Rs 4.30 crore) a day.

The situation was equally grave for other national carriers. Driven by mounting losses of almost Rs 10 crore a day. Air India, in its merged avatar, was considering severe cost cutting measures like slashing employee allowances, reducing In flight catering expenses on short haul flights and restructuring functional arms. The airline also considered other options like cutting maintenance costs by stationing officers at hubs, instead of allowing them to travel at regular intervals.

reduce operational inefficiency. " According to analysts, Jet Airways could be looking at a combined annual loss of around Rs 3,000 crore, if there were no improvement in operational efficiencies and ATF prices. Against this backdrop, the airline had asked its employees to raise the service bar and arrest falling passenger load.

Question 36

# The total loss for the airline industry was likely to be Rs. 10,000 crore. Jet Airlines lost Rs. 3,000 crore, Air India lost Rs. “X” crore and “rest of the airlines” lost Rs. “Y” crore. What was the loss for the “rest of the airlines”, in 2008?

Solution

The loss to Air India is given as almost Rs. 10 crore a day, which is equal to Rs 366*10=3660 crores in a year.(leap year)

Total loss = 10000=3000+3660 + rest of the airlines loss

=> Rest of the airlines loss = Rs 3340 crore
Hence, option B is the correct answer.

• All Quant Formulas and shortcuts PDF
• 15 XAT previous papers with solutions PDF