High Point Aviation: Operating Breakevens

Abstract

A couple wants to start a small flight charter company to serve the mining, oil, scientific, and wilderness adventure clients of northern Canada but worry that their thin financial base necessitates a sizable scale of flight operations during their first year. If a substantial revenue stream was slow to develop, or expenses were too high, their first year might be their last year—they had no financial slack. The fundamental question is, given their preliminary budget figures for the coming year, what level of revenue-generating flight miles did they need to just break even?