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Old Feb 8, 2010 | 11:07 am
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Sixth Freedom
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You need to consider that some (most?) passengers will be connecting too. Quite how that GBP 6k a passenger connecting at LHR to ORD is allocated to the domestic and the longhaul is not clear.

But if the seat on the ORD would otherwise be unsold and that service is paid for by other passengers you could potentially allocate most of the GBP 6k to the domestic, going a good way towards covering costs for just one passenger.

Since airline costs and revenue are not fully allocatable calculating profit and loss on particular routes from a network perspective presents tricky problems.

You can also allocate part of the domestic costs to the longhaul flight if you like, effectively reducing the domestic costs.

I suspect GBP 60k on LHR-EDI is far from the mark.

Last edited by Sixth Freedom; Feb 8, 2010 at 11:13 am
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