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Q. An airline transportation consultant offers the CEO of Blue Star struggling new commercial airline company, the subsequent advice concerning the airline's high operating costs in the current quarter: ‘You don't have enough aircraft to operate efficiently. Elucidate however, at some point in the long run, you will have the opportunity to add aircraft to your fleet in order to reduce your total costs also still carry the same load of passenger.' Does this advice make any sense? In the long run, Elucidate how can Blue Star's total costs fall by adding more aircraft to its fleet? Must Blue Star experience economies of scale for the consultant's advice to be correct?
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