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EASTERN MEDITERRANEAN UNIVERSITY
DEPARTMENT:
TOURISM AND HOSPITALITY MANAGEMENT
NAME: FREDERICK BASSEY
STUDENT NUMBER: 135...
COMPANY PROFILE
• Turkish Airlines was established on 20 May
1933 as State Airlines Administration
•Turkish Airline has be...
•The Airline’s headquartered is at the Turkish
Airlines General Management Building of Atatürk
Airport Istanbul, Turkey
•T...
Revenue 18.78 billion
Operating income
1.48 billion
Net income
683 million
Total assets
25.4 billion
Total equity
6.96 bil...
COMPANY MISSION
To become the preferred leading
European air carrier with a global
network of coverage thanks to its stric...
COMPANY VISION
To become an air carrier with;
•a continued growth trend over industry average
•zero major accidents/crashe...
•an entrepreneurship that creates business opportunities
for fellow members in the Star Alliance and takes
advantage of th...
CORE VALUES
•Honesty and Fair Dealing
•Customer Satisfaction
•Demonstrating Respect to Individuals
•Innovation
•Team Work
...
BREAKEVEN ANALYSIS (APPLICATION)
•Breakeven analysis is an analytical management tool
•Breakeven analysis is an analytical...
The formula for calculating the breakeven point is give
as
BE Quantity = TFC/(P-VC)
This is the calculation for the number...
Example: say Turkish airline has a total fixed cost
2milliontl and variable cost of 3000tl and each seat
in the aircraft s...
Example 2: if Turkish airline wants to make a
profit of 1million, how many seats will they
have to sell? Using the figures...
Example 3: if Turkish airline were to sell a total of
2000 seats, how much profit would it make?
Solution:
(R-VC)-FC = Pro...
Finally, a good understanding of the
breakeven analysis will help
management make strategic
decisions, such as marketing,
...
THANK YOU
FOR YOUR ATTENTION
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Applying break even analysis: Case study of Turkish Airline

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Applying break even analysis: Case study of Turkish Airline

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Applying break even analysis: Case study of Turkish Airline

  1. 1. EASTERN MEDITERRANEAN UNIVERSITY DEPARTMENT: TOURISM AND HOSPITALITY MANAGEMENT NAME: FREDERICK BASSEY STUDENT NUMBER: 135147 TITLE: APPLY BREAK-EVEN ANALYSIS CHPT 4
  2. 2. COMPANY PROFILE • Turkish Airlines was established on 20 May 1933 as State Airlines Administration •Turkish Airline has been in existence for 81 years •The slogan of Turkish Airline is Widen your World •It has a Total number of 18,667 employees as at November 2013
  3. 3. •The Airline’s headquartered is at the Turkish Airlines General Management Building of Atatürk Airport Istanbul, Turkey •Turkish Airline operates scheduled services to 41 domestic and 203 international airports in Europe, Asia, America and Africa •It flights schedules covers 244 destinations •Turkish Airline is the fourth-largest carrier in the world by number of destinations
  4. 4. Revenue 18.78 billion Operating income 1.48 billion Net income 683 million Total assets 25.4 billion Total equity 6.96 billion
  5. 5. COMPANY MISSION To become the preferred leading European air carrier with a global network of coverage thanks to its strict compliance with flight safety, reliability, product line, service quality and competitiveness, whilst maintaining its identity as the flag carrier of the Republic of Turkey in the civil air transportation industry.
  6. 6. COMPANY VISION To become an air carrier with; •a continued growth trend over industry average •zero major accidents/crashes •most envied service levels worldwide •unit costs equating with low cost carriers •sales and distribution costs below industry averages
  7. 7. •an entrepreneurship that creates business opportunities for fellow members in the Star Alliance and takes advantage of the business potential provided by them •a staff well adapted to modern governance principles by observing the best interests of not only shareholders but also stakeholders •a personnel constantly developing their qualifications with the awareness of the close relationship between the benefits for the company and the added value that they contribute
  8. 8. CORE VALUES •Honesty and Fair Dealing •Customer Satisfaction •Demonstrating Respect to Individuals •Innovation •Team Work •Leadership •Productivity •Confidentiality •“Open Door” Policy
  9. 9. BREAKEVEN ANALYSIS (APPLICATION) •Breakeven analysis is an analytical management tool •Breakeven analysis is an analytical tool under COST-VOLUME- PROFIT analysis (CVP) which is an analytical technique for profit planning. CVP is the relationship between sales, cost and profits. This analysis studies the behavior of cost. •The break-even level or break-even point represents the sales amount—in either unit or revenue terms •A company has broken even when its total sales or revenues equal its total expenses. At the breakeven point, no profit has been made, nor have any losses been incurred •The breakeven determines margin
  10. 10. The formula for calculating the breakeven point is give as BE Quantity = TFC/(P-VC) This is the calculation for the number of unit to be sold for the firm to breakeven (no loss no Profit or TR = TE)
  11. 11. Example: say Turkish airline has a total fixed cost 2milliontl and variable cost of 3000tl and each seat in the aircraft sells at 5000 tl. How many seats will Turkish Airline have to sell in one day to breakeven? Solution: FC= 2,000,000tl VC= 3000tl P= 5000tl BE quantity = TFC/(P-VC) 2,000,000/(5000-3000) = 1000 seats
  12. 12. Example 2: if Turkish airline wants to make a profit of 1million, how many seats will they have to sell? Using the figures from example 1 Solution = FC + Target profit/(P-VC) 2,000,000+1,000,000/(5000-3000) = 1500 seats
  13. 13. Example 3: if Turkish airline were to sell a total of 2000 seats, how much profit would it make? Solution: (R-VC)-FC = Profit R= P * Nos of seat = 5000* 2000 = 10,000,000 VC = VC * Nos of seat = 3000 *2000 = 6,000,000 FC = 1,000,000 Profit = (10,000,000-6,000,000)- 2,000,000 =2,000,00tl
  14. 14. Finally, a good understanding of the breakeven analysis will help management make strategic decisions, such as marketing, accounting (cost) etc…
  15. 15. THANK YOU FOR YOUR ATTENTION

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