dat4life
Jun 8, 12, 6:13 pm
Something I've always wondered about is how much an airline makes per flight. Obviously there many variables that are factored in to the equation, but it's pretty interesting to learn that it is possible for only 9 passengers out of 100 to be the actual 'profit' on the flight. It certainly puts on those anciliary fees and FCM/TOD programs into perspective. At the end of the day, an airline is a for PROFIT business.
http://online.wsj.com/article/SB10001424052702303296604577450581396602106.html?m od=googlenews_wsj#project%3DMIDSEAT0607%26articleT abs%3Darticle
Steve M
Jun 9, 12, 7:11 pm
That's an interesting perspective, as it tries to break down all the various costs it takes to operate a flight. I prefer a more "macro" method: take the amount of money an airline makes in a year, and divide it by the number of passengers. That gives you the profit per passenger.
I took figures for 2007, since that was the last year before oil prices really shot up and before the economy tanked. Many carriers made a profit that year. UA made a profit of $5.27 per passenger, and CO made $8.61 per passenger. Since those are aggregate numbers, they take into account everything systemwide, from feeder flights to long-haul int'l with high-priced premium cabins.
Of course, with tens of millions of passengers, they can make some real money at scale. But still, even when they are profitable, carriers tend to not make a large amount of money per passenger. I think that goes a long way in explaining why certain decisions that may seem "petty" or "cheap" are made: In my above example, doing something that added only $9 in cost per passenger would have completely wiped out all profits at both CO and UA in 2007.
That's an interesting perspective, as it tries to break down all the various costs it takes to operate a flight. I prefer a more "macro" method: take the amount of money an airline makes in a year, and divide it by the number of passengers. That gives you the profit per passenger.
I think that really makes the most sense, since we all know that airfares between given city pairs often seem to have nothing to do with the actual costs.