FlyerTalk Forums - View Single Post - Profitable/Unprofitable Segements
View Single Post
Old Oct 26, 2019 | 1:55 am
  #13  
brunos
FlyerTalk Evangelist
Community Builder
All eyes on you!
15 Years on Site
 
Join Date: Jul 2006
Location: Hong Kong, France
Programs: FB , BA Gold/OW emerald, QR
Posts: 17,049
Airlines struggle to define "route profitability" and rely on many internal accounting costing/pricing assumptions.
Two examples:

- Many regional pax use regional flights as feeder to longhaul. How do you assign the regional segment accounting wise (this is usually different from the NUC pricing)? A regional route that does not show huge loads but contributes a lot to longhaul traffic might be very profitable.

- HKG-CDG moves over the years from 1 daily to 10 weekly and planned two daily. CX was offering huge discount in premium cabins to fill the two daily planes. Suddenly CX decided to cut down to one daily. No more attractive discount in premium cabins. Hence that single flight must look very profitable despite the high CDG station fixed costs.
brunos is offline