The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

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  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

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    Uckf 33 gi05

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    fjpotfn oj pbf igvtpb svc`tcjp. {opb ngqqfq tfugtpf` igt fyft qojknf svctpft `vtojk

    pbf fct. oj 4552* Pbf avmvncpoyf svctpftn ngqq {cq -$4;1*21 monnogj "qnokbp

    `oqatfucja {opb pbf cjjvcn ycnvf koyfj. -$499*11 monnogj/* Pbf qgno` nojf lgojq pbf

    avmvncpoyf ycnvfq igt iotqp cj` igvtpb svctpftq dvp pbf Puf OOO `cqbf` nojf dfkq

    cppfjpogj* Pboq lgojq pbf qfagj` svctpft pg pbf igvtpb svctpft* Pbf kfjftcn ptfj` oq

    {bcp oq omugtpcjp bftf. jgp pbf frcap jvmftoacn ycnvfq* Puf OOO dfbcyogt {f qff

    bftf qffmq pg df pbf utfavtqgt igt fopbft c mftkft "oi qgmfgjf oq ojpftfqpf`/ gt c

    dcjhtvupa ionojk "{bfj jg qvopgtq ctf cyconcdnf. cq {opb Kfjftcn Mgpgtq* [bfjKM uvdnoan cjjgvjaf` opq {onnojkjfqq pg qfnn gii qgmf gi opq mgjf ngqojk

    igvj`tofq. dcah oj 3??5q. {boab utg`vaf mcj atopoacn cvpgmgpoyf acqpojkq pbftf

    {ftf jg dvftq# Pbf ncppft oq dcqf` gj tfagnnfapogj gi uvdnoqbf` tfugtpq `vtojk pbcp

    pomf*/Pboq qbgvn` df agmuctf` pg pbf ktcub igt 3??6 {bfj Cot Ptcj {cq cdnf pg

    tfugtp utgiopq {opb yft qmcnn tfyfjvfq* Pbf cjjvcn tfyfjvf igt 3??6 {cq gjn

    -165

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    Ktg{pb `vtojk c qojknf fct

    Avmvnc

    poyfUtgiopq.X$.monnogjq]

    Ktg{

    pb`vtojkcqojknffct

    Puf OOO dfbcyogt

    =-5*344r ( 12*5;

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    @cqbf` nojf4552 Fygnvpogj gi

    Tfyfjvfq-Ngqqfq

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  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    12/40

    Uckf 34 gi05

    $19;*;6; monnogj. dfp{ffj 65& pg 95& gi pbf tfyfjvf igt cj gjf svctpft oj 4552*

    Qponn. Cot Ptcj agvn` jgp tfugtp c utgiop oj 4552*

    Iokvtf 0< Pbf utgiopcdnf fct 3??6. {opb Puf O dfbcyogt tfyfcnf` d pbf qgno`

    vu{ct` qnguojk nojf. oq agmuctf` {opb pbf Puf OOO dfbcyogt gdqftyf` oj 3??9.

    3??;. cj` 4552 {opb cjjvcn ngqqfq* Fyfj {opb ktfcpn ojatfcqf` tfyfjvfq. cq

    tfyfcnf` d pbf icap pbcp pbf `cpc igt 3??6-3??; ctf atg{`f` pgkfpbft jfct pbf

    gtokoj. Cot Ptcj {cq vjcdnf pg tfugtp c utgiop oj 4552* "Pbf Puf OOO nojf igt 3??;

    oq cj ojpftfqpojk iojcjaocn frcmunf gi c nojf {opb c jfkcpoyf qnguf {boab mchfq c

    jfkcpoyf ojpftafup gj DGPB pbf utgiopq cj` pbf tfyfjvfq crfq* Mgqp Puf OOO nojfqmchf c ugqopoyf ojpftafup gj dgpb pbf crfq* / Ojqpfc` gi utgiopq oj`oacpf` d pbf

    frptcugncpogj gi pbf Puf O nojf igt 3??6. op tfugtpf` opq bokbfqp ngqqfq. tfyfcnf` d

    pbf p{g Puf OOO nojfq igt 4552* Oj gpbft {gt`q. pbf svc`tcjp igvt ktcub oq pg df

    {bgnn cygo`f` {bfj {f agjqo`ft pbf avmvncpoyf `cpc "itgm svctpftn tfugtpq/ oj c

    -055

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    Avmvncpoyf

    Utgiopq.X$.monnogjq]

    Ktg{pb`

    vtojkcqojknffct

    Avmvncpoyf Tfyfjvfq. r X$. monnogjq]

    Ktg{pb `vtojk c qojknf fct

    Puf O "3??6/Yftqvq Puf OOO

    "3??9. 3??;. 4552/

  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    13/40

    Uckf 31 gi05

    qojknf fct* Op mc df pbf utfavtqgt pg fopbft dcjhtvupa ionojk "oi jg gjf {cjpq pg

    pchf gyft pbf agmucj/ gt c mftkft {opb c {onnojk qvopgt*

    6* Puf OOO DfbcyogtMvnpo-fct Utgiopq-Tfyfjvfq Ktg{pb

    Agjqo`ft jg{ pbf ignng{ojk ojpft-fct `cpc igt 455;-4535 itgm pbf 4535 Cjjvcn

    Tfugtp* Pboq `cpc oq ungppf` oj Iokvtf 6 cj` tfyfcnq cj ojpftfqpojk yftqogj gi pbf

    Puf OOO dfbcyogt frpfj`ojk gyft qfyftcn fctq*

    _fct Tfyfjvfq. r$. monnogjq Utgiopq. $. monnogjq Agqpq "r/$. monnogjq

    4535 493?*;34 12*601 4623*39?455? 4103*004 310*994 4459*;24552 4664*0;2 -499*110 4232*234455; 415?*?21 64*921 446;*1

    [f qff c yft ojpftfqpojk ucppftj oj pbf pomf-fygnvpogj gi utgiopq cj` tfyfjvfq*

    Pboq acj df `fqatodf` d pbtff qptcokbp nojf qfkmfjpq cnn {opb c jfkcpoyf qnguf*

    Igt 455; cj` 4552< = -3*136r ( 15?4

    Igt 4552 cj` 455?< = -3*136r ( 15?4

    Igt 455? cj` 4535< = -5*106r ( ?01*01

    Pbf tfyfjvfq ojatfcqf` dfp{ffj 455; cj` 4552 dvp pbf utgiopq `fatfcqf`qg

    mvab pbcp CotPtcj capvcnn tfugtpf` c bvkf ngqq# Pboq oq {bcp {cq ancqqoiof` cq

    Puf OOO dfbcyogt cj` oq oj`oacpf` d pbf nojf {opb pbf jfkcpoyf qnguf "b > 5. a : 5/*

    Vqojk pbf gtmvncf koyfj fctnoft. igt pbf fsvcpogj gi c qptcokbp nojf agjjfapojk cjp{g ugojpq. {f kfp = -3*136r ( 15?4* Pbf cttg{ qbg{q pbf `otfapogj gi pomf*

    Jfrp. tfyfjvfq `fatfcqf` dfp{ffj 4552 cj` 455? dvp jg{ CotPtcj tfugtpf` c joaf

    utgiop* Pbf `cqbf` nojf. {opb pbf jfkcpoyf qnguf. oj`oacpfq pboq cj` pchfq vq pg pbf

    ugojp cdgyf pbf tf` nojf* Pboq oq cj ojpftfqpojk yctocjp gi pbf Puf OOO dfbcyogt.

  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    14/40

    Uckf 30 gi05

    {opb utgiopq ojatfcqojk {opb `fatfcqojk tfyfjvfq* "Pboq oq gdqftyf` {opb gpbft

    agmucjofq cq {fnn. qff _cbgg `oqavqqf` oj Tfiq* X3-1]*/ Pbf fsvcpogj igt pbf jf{

    Puf OOO nojf oq = -3*136r ( 15?4*

    Jfrp. tfyfjvfq ojatfcqf` dfp{ffj 455? cj` 4535 dvp utgiopq `fatfcqf` gjaf ckcojdvp c ngqq {cq cygo`f`* Pboq pgg oq Puf OOO dfbcyogt. qomonct pg pbcp gdqftyf`

    dfp{ffj 455; cj` 4552* Pbf fsvcpogj gi pboq nojf oq = -5*106r ( ?01*01*

    Iokvtf 6< CotPtcj utgiopq-tfyfjvfq ktcub igt 455;-4535 qbg{ojk cj ojpftfqpojk

    atoqq-atgqqojk Puf OOO dfbcyogt"gt c dcah cj` igtpb Cot Ptcj q{ggqbojk/* Pbf

    bgto|gjpcn tf` nojf oq pbf r-croq* Gjf frufapq utgiopq pg ojatfcqf {opb ojatfcqojk

    tfyfjvfq* Pboq oq pbf jgtmcn Pyuf Odfbcyogt "ugqopoyf ojpftafup gj tfyfjvfq-croq/gt Pyuf OO dfbcyogt "ugqopoyf ojpftafup gj pbf utgiopq-croq/ Dvp. {f cnqg qff pbf

    guugqopf dfbcyogt {opb qfyftcn agmucjofq. cp nfcqp oj qgmf qopvcpogjq* Oi utgiopq

    `fatfcqf {opb ojatfcqojk tfyfjvfq. gt ojatfcqf {opb `fatfcqojk tfyfjvfq "fq. op oq

    ugqqodnf#/. {f bcyf Puf OOO dfbcyogt* Pboq oq {bcp {f qff bftf {opb Cot Ptcj*

    -155

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    Tfyfjvfq. r X$. monnogjq]

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    Puf OOO mg`f455;-4535

  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    15/40

    Uckf 36 gi05

    9* Puf O. Puf OO. cj` Puf OOO DfbcyogtMvnpo-fct Utgiopq-Tfyfjvfq Ktg{pb

    C qvaafqqivn agmucj mvqp tfugtp c utgiop fyft fct* D pbcp mfcqvtf. CotPtcj

    bcq tfugtpf` c utgiop igt 2 gvp gi 35 tfafjp fctq. {opb c qmcnn ngqq oj 4553 cj` c

    mvab dokkft ngqq oj 4552* Dvp pchf c actfivn nggh cp pbf utgiopq-tfyfjvfq ktcub oj

    Iokvtf 9* Jg anfct ucppftj oq tfyfcnf`* Agjptcqp pboq {opb pbf utgiopq-tfyfjvfq ktcub

    igt Qgvpb{fqp. igt pbf uftog` 3??4-4535. {boab tfyfcnq c anfct Puf O dfbcyogt*

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    Ptcjq iojcjaocn uftigtmcjaf oq ugqqodnf oi {f okjgtf pbf ngqq igt 4552*

    Iokvtf 9< Fttcpoa utgiopq-tfyfjvf ktcub igt CotPtcj igt pbf

    pfj-fct uftog` itgm 4553-4535*

    -155

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    onnogjq]

  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    16/40

    Uckf 39 gi05

    Iokvtf ;< Cj cnpftjcpoyf yof{ gi pbf CotPtcj utgiopq-tfyfjvfq ktcub. oi {f

    agmunfpfn okjgtf pbf 4552 `cpc*

    Jg{ pbf utgiopq `cpc acj df `fqatodf` d p{g qptcokbp nojfq* Pbf tf` nojf. {opb pbffsvcpogj = br ( a = 5*540r ( ;2*6 qomun lgojq pbf 4551 cj` 455? `cpc* Pboq oq

    Puf OO dfbcyogt "b : 5. a : 5/* Utgiopq ojatfcqf {opb ojatfcqojk tfyfjvfq dvp

    vqvcnn cp c ng{ft tcpf pbcj c Puf O dfbcyogt "b : 5. a > 5/*

    Pbf dnvf nojf oq pbf dfqp-iop nojf pbtgvkb pbf tfmcojojk `cpc ugojpq. {opb pbf

    fsvcpogj = 5*5430r30*02 = 5*5430 "r9;9*4/* Pboq oq anfctn c Puf O

    dfbcyogt* Pbf nojf mchfq c ugqopoyf ojpftafup gi r = r5 = -a'b = 30*02'5*5430 =

    $9;9*4 monnogj gj pbf tfyfjvfq-croq* Pbf `cpc igt 4553 agjiotmq pboq avp gii qojaf

    CotPtcj bc` c qmcnn ngqq {opb tfyfjvfq gi $996*390 monnogj* Dfgj` pboq avp-gii.gt dtfchfyfj. tfyfjvfq. CotPtcj {cq cdnf pg tfugtp c qmcnn utgiop "mvab nfqq pbcj

    {opb pbf Puf OO qopvcpogj. pbf `oiiftfjaf dfojk pbf nctkf ugqopoyf ojpftafup/*

    -05

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    5

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    05

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    5 655 3555 3655 4555 4655 1555 1655

    Tfyfjvfq. r X$. monnogjq]

    Utgiopq.X$.monnog

    jq] Puf OO

    = 5*540r ( ;2*6

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    = 5*5430 "r

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  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    17/40

    Uckf 3; gi05

    ;* Ptcjqopogjq oj Utgiopq-Tfyfjvfq Ktg{pb

    Pbf Cot Ptcj Utgiopq-Tfyfjvfq `cpc igt pbf fjpotf qorpffj "39/ fct uftog` itgm

    3??1 pg 4535 acj df `fqatodf`. cq qffj oj Iokvtf 2. d c qftofq gi qptcokbp nojf

    qfkmfjpq {boab tfyfcn pbf ptcjqopogjq dfp{ffj pbf pbtff Pufq gi dfbcyogt

    qvkkfqpf` d pbf qomunf nojfct utgiopq-tfyfjvfq nc{*

    Iokvtf 2< Pbf utgiopq-tfyfjvfq ktcub igt CotPtcj igt pbf qorpffj fct "39/ uftog`

    3??6-4535* Cot Ptcj tfugtpf` c utgiop igt gjn 4 gvp gi pbf 9 c``opogjcn fctq "oj

    4555 cj` 3??6/* Pboq 39-fct ktcub tfyfcnq dgpb pbf Puf O "dgpb pbf dnvf cj` tf`

    nojfq {opb c ugqopoyf qnguf/ cj` pbf Puf OOO dfbcyogt {opb cj ojpftyfjojk Puf OOqbg{j d pbf `cqbf` nojf* Pbf qptcokbp nojf qfkmfjpq tfyfcn pbf kfjftcn ptfj`q*

    Pboq nfc`q vq pg pbf ojptokvojk ugqqodonop gi c qmggpb jgjnojfct avtyf. {opb c

    mcromvm ugojp. pg `fqatodf pbf qcmf `cpc. cq qvkkfqpf` d pbf `cqbf` avtyfq

    "JGP `ftoyf` itgm cj mcpbfmcpoacn acnavncpogjq/ oj Iokvtf ?* Pbf igvt ugojpq

    -155

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    ogjq]

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  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    18/40

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    atoqq-atgqqojk Puf OOO dfbcyogt `oqavqqf` fctnoft*

    2* Mcromvm Ugojp Utgiopq-Tfyfjvfq Ktcub

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    igt CotPtcj* Uftbcuq. pboq {cq utfavtqgt pg pbf casvoqopogj gi Cot Ptcj* C

    agmucj acjjgp agjpojvf pg guftcpf igt ngjk oj pbf Puf OOO mg`f {opb utgiopq

    `fatfcqojk cq tfyfjvfq ojatfcqf. gt yoaf yftqc* "Oj pbf acqf gi Kfjftcn Mgpgtq.

    {bftf c qomonct Puf OOO mg`f {cq gdqftyf` gyft qfyftcn fctq. op fyfjpvcnn nf` pgopq boqpgtoa dcjhtvupa ionojk oj Lvjf 455?*/ Jgpoaf bg{ `oiiftfjp agjanvqogjq ctf

    uftmoppf` d pbf 35-fct `cpc cj` pbf 39-fct `cpc* Pbf icnnojk uctp gi pbf avtyf

    acj df fjyoqogjf` {opb pbf 35-fct `cpc dvp pbf toqojk uctp oq gjn tfyfcnf` oi {f

    agjqo`ft pbf 39-fct `cpc* Puf OOO dfbcyogt oq cn{cq utfaf`f` d Puf O cj`'gt

    Puf OO* C toqf cn{cq utfaf`fq c icnn* Bfjaf. pbf Puf OOO dfbcyogt vqvcnn

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  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    19/40

    Uckf 3? gi05

    qvkkfqpq pbf froqpfjaf gi cj fctnoft Puf O dfbcyogt cj` cnqg c mcromvm ugojp gj

    pbf utgiopq-tfyfjvfq ktcub* Pbf kfjftcn fsvcpogj. = mrj Xf-cr '"3 ( df-cr/ ] ( a.

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    gi pbf dfqp-iop nojf pbtgvkb pbfqf ugojpq oq = br ( a = b "r r5/ = 5*341r5*303

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    gi t4 = 5*?16* Cppfjpogj qbgvn` cnqg df acnnf` pg pbf jfctn UFTIFAP utgiopq-

    tfyfjvfq ktcub igt Cuunf Oja*. {opb t4 = 5*???26. tfugtpf` oj pbf ctpoanfq aopf` oj

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    5

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    = 5*341 "r 3*360/t4 = 5*?19

  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    20/40

    Uckf 45 gi05

    cj` utgiopq `fatfcqojk. fct-cipft-fct. cq tfyfcnf` d pbf `fatfcqojk qngufq b cj`

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    oj 4551 dvp pbf utgiopq {fjp vu gjn d cdgvp 16& "itgm $355 monnogj pg $316

    monnogj/* C mgtf `fpconf` cjcnqoq gi pbf agqpq-tfyfjvfq tfncpogj oq utgyo`f` oj pbf

    qfuctcpfn oj pbf ctpoanf gj Qgvpb{fqp Cotnojfq. qff dodnogktcub*

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    Uckf 43 gi05

    Iokvtf 33< Avmvncpoyf Tfyfjvfq yftqvq Utgiopq igt Cot Ptcj "3??1-4535/*Ojpftfqpojkn. cipft pbf ufch oj 3??6. pbf avmvncpoyf utgiopq jfyft ivnn tfagyftf`*

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    abcjkojk qnguf oq = mrj {bftf j = 3 koyfq pbf qptcokbp nojf cj` j : 3 ofn`ojk c

    avtyf {opb ojatfcqojk qnguf "caafnftcpogj gi / cj` j > 3 ofn` c avtyf {opb

    -465

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    Avmvncpoyf Tfyfjvfq. r X$. donnogjq]Qpctpojk 3??1

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    onnogjq]

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  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    22/40

    Uckf 44 gi05

    `fatfcqojk qnguf "`fafnftcpogj gi /. qff Iokvtf 34* Pboq oq acnnf` pbf ug{ft nc{

    cj` j oq acnnf` pbf ug{ft nc{ oj`fr* Itoapogjcn. gt cot. tfqoqpcjaf "gt pbf `tck/.

    fruftofjaf` d c mgyojk gdlfap qvab cq c kgni dcnn. act. ptvah. cotatcip. gt c tgahfp

    oq gipfj frutfqqf` vqojk pbf ug{ft nc{*

    Iokvtf 34< Qomunf onnvqptcpogj gi pbf ug{ft-nc{ dfbcyogt. = mrj igt pbf pbtff

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    Tfyfjvfq r

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  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

    24/40

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    Uckf 46 gi05

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  • 7/31/2019 The Air Tran Story: The Merger and Maximum Point on Profits-Revenues Graph

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    igt {boab = mrj

    f-cr

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    Uckf 4; gi05

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    bppu

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    Uckf 42 gi05

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