In the airline industry, a critical concept is the ‘break-even load’, the proportion of seats on a flight for which an airline needs to sell tickets in order to cover its opportunity costs for that...

In the airline industry, a critical concept is the ‘break-even load’, the proportion of seats on a flight for which an airline needs to sell tickets in order to cover its opportunity costs for that flight. An aspect of early competition between Qantas and Virgin at the time the latter began operating in Australia was that Virgin chose to rent much of its infrastructure and contract with external suppliers for services such as call-centre ticket selling, whereas Qantas tended to own its infrastructure and to use employees for ticket selling. How do you think these different approaches would have affected the break-even load of each airline? How would this have affected Virgin’s capacity to compete with Qantas?