Critical Reasoning

With the advent of the internet, many large commercial airlines have implemented online customer suport, reservation, and even check-in systems to take advantage of the cost-savings available through automated customer-facing services. The executives at NorthCoast Airlines recently debated whether the costs associated with constructing, deploying, and maintaining these types of systems for their small regional carrier were warranted. The numbers they used to conduct their analysis of the projected savings associated with the online systems were calculated assuming that ticket prices and market share remained constant.

Which of the following, assuming it is true, constitutes the most serious oversight in the debate among the NorthCoast executives?

A) The future value of the money to be invested in the new systems cannot be determined without accurate projections of the rate of inflation.

B) The costs associated with these new systems are so prohibitive that even large commercial carriers do not recover their investment for many years.

C) These new customer-facing services can be expected to improve customer satisfaction and attract significant numbers of new customers.

D) The initial costs of development for any outline computerized system cannot be known with great certainty.

E) Online ticketing systems make pricing transparent to an airline's current and prospective customers.


OA C