Originally Posted by
AlwaysAisle
2006 CNBC aired episode of American Airlines on their A Week in the Life series program. In the program American Airlines gave insight to their operation. Revenue management, at that time the top guy at the revenue management said 80% tickets sold were controlled by revenue management software and fares were set by the software, and 20% of situations requires human intervention to override software. The cargo division said South America is most profitable for AA Cargo and top destination for cargo from South American is NYC area and Southern California. The top guy at the cargo department said the cargo department continuously requests wide body aircraft on MIA-JFK/EWR/LAX.
On the show American showed the profit of individual flights. Showed one DFW-BDL 737 flight, cheapest fare was somewhere around $50 and only less than 10 of those fares were sold and most expensive fare sold was somewhere of $700 where passenger was sitting in Main Cabin. All 16 F seats were occupied by FF upgrades and there was not a single F fare sold on that flight.
They showed AA 1 JFK-LAX (operated by 767-200 back then) and showed profit calculation. Total ticket sales, total cargo sales, total luggage fees, total onboard liquors and food sales, etc. Then AA subtracted fuel cost, salary for pilots, salary for FAs, maintenance cost, airport fees, liquor and food catering cost, etc. After all were calculated AA said that this particular flight made a profit of $210, yes, only $210.
It was just one example of one particular flight and it was 2006. It was just a snapshot of one flight on one day. For example DFW-BDL flight shown on the show made around $3000 profit, but AA said that was exception and majority of flights does not earn that much profit.
That is extremely interesting, but I do not think it is accurate for todays AA. In 2006, LAA made $231 million and LUS made $304 million. In 2017, AA made $1.9 billion after taxes.