If aeronautical revenue increases while costs remain constant, what happens to farebox return?

• A. It becomes negative
• B. It decreases
• C. It remains the same
• D. It increases

Answer: (D)

Farebox return is the ratio of aeronautical revenue to operating costs, showing how much of the costs are recovered from charges to airlines and passengers. If aeronautical revenue goes up while costs stay the same, the numerator increases while the denominator is fixed, so the ratio increases. For example, with costs at 100 and aeronautical revenue at 60, the farebox return is 0.60. If revenue rises to 80 while costs remain 100, the return becomes 0.80. So the farebox return increases in this scenario.