Do a case study of Northeastern Airlines.

Northeastern Airlines is a regional airline serving nine citiesin the New England states as well as cities in New York, NewJersey, and Pennsylvania. While nonstop flights are available forsome of the routes, connecting flights are often necessary.Northeastern Airlines Service Area The network shows the citiesserved and profit in U.S. dollars per passenger along each of theseroutes. The routes from ?Boston-to-Providence and fromProvidence-to-Boston make only $ 9 per passenger profit after allexpenses. To service these cities, Northeastern operates a fleet ofsixteen 122-passenger Embraer E-195 jets. These jets, which werefirst introduced by Embraer in late 2004, have helped NortheasternAirlines remain profitable for a number of years. However, inrecent years, the profit margins have been falling, andNortheastern is facing the prospect of downsizing their operations.Management at Northeastern Airlines has considered several optionsto reduce cost and increase profitability. Due to Federal AviationAdministration regulations, the company must continue to serve eachof the nine cities. How they serve these cities, however, is up tothe management at Northeastern. One suggestion has been made toprovide fewer direct flights, which would mean that a city servedby Northeastern might only have direct flights to one other city.The company plans to hire a marketing analytics consultant todetermine how demand would be impacted by longer flights with moreconnections, and to forecast the demand along each of the routesbased on a modified flight operations map. Before hiring theconsultant, the company would like to first determine the mostprofitable (on a profit per passenger basis) way to continueserving all of the cities.