Business Exam Questions Paper 1: Section A June 2020 /50
(a) Using the data from Extract A and the information above, calculate the difference in
percentage growth in air passenger numbers between 2015 and 2016. You are advised to
show your working [4]
Percentage Growth = A - B/B
Percentage Growth = 3.75(bn) - 3.5(bn) = 0.25(bn)
Percentage Change = 0.25(bn)/3.5 (bn) x 100 = 7.14%
2015 Percentage Growth = 6.7%
7.14% - 6.7% = Increase of 0.4%
(b) Using the data from Extract B, draw a supply and demand diagram for airline tickets to
show the likely effects of the change in jet fuel prices between 2014 and 2015 [4]
Decrease in Price (P1 to P2)
Increase in Supply (S1 to S2)
Increase in Quantity Demanded (Q1 to Q2)
(c) Assess the consequences to a business, such as Spirit Airlines, of only selling its tickets
online [10]
Spirit Airlines selling the tickets online only will reduce operating costs as any
customer service that is normally available will not be there. Other expenses
associated with the maintenance and administration of the business on a day-to-day
basis will not be costly for the business. This is a positive for the low-rated, but
growing business in the airline industry. This will help the business to save money
from jobs such as 1:1 customer service, dealing with customer queries and
complaints or any maintenance role etc. Selling tickets online will free up these roles
and therefore save money for the business.
Selling online also results in the distribution costs of sales of tickets to customers to
be totally reduced. E-commerce transactions online make shopping cheaper, more
efficient and easier for the customer and benefit the business hugely as it increases
net revenue. For Spirit Airlines to organise a location for customers to attend and
whilst running the premises daily will weight hard on the low-profile business. Selling
online will make it more convenient and customers can stay home and purchase the
service they want, increasing the revenue of the business without effecting its
expenses.
(a) Using the data from Extract A and the information above, calculate the difference in
percentage growth in air passenger numbers between 2015 and 2016. You are advised to
show your working [4]
Percentage Growth = A - B/B
Percentage Growth = 3.75(bn) - 3.5(bn) = 0.25(bn)
Percentage Change = 0.25(bn)/3.5 (bn) x 100 = 7.14%
2015 Percentage Growth = 6.7%
7.14% - 6.7% = Increase of 0.4%
(b) Using the data from Extract B, draw a supply and demand diagram for airline tickets to
show the likely effects of the change in jet fuel prices between 2014 and 2015 [4]
Decrease in Price (P1 to P2)
Increase in Supply (S1 to S2)
Increase in Quantity Demanded (Q1 to Q2)
(c) Assess the consequences to a business, such as Spirit Airlines, of only selling its tickets
online [10]
Spirit Airlines selling the tickets online only will reduce operating costs as any
customer service that is normally available will not be there. Other expenses
associated with the maintenance and administration of the business on a day-to-day
basis will not be costly for the business. This is a positive for the low-rated, but
growing business in the airline industry. This will help the business to save money
from jobs such as 1:1 customer service, dealing with customer queries and
complaints or any maintenance role etc. Selling tickets online will free up these roles
and therefore save money for the business.
Selling online also results in the distribution costs of sales of tickets to customers to
be totally reduced. E-commerce transactions online make shopping cheaper, more
efficient and easier for the customer and benefit the business hugely as it increases
net revenue. For Spirit Airlines to organise a location for customers to attend and
whilst running the premises daily will weight hard on the low-profile business. Selling
online will make it more convenient and customers can stay home and purchase the
service they want, increasing the revenue of the business without effecting its
expenses.
