FlyerTalk Forums - View Single Post - How much profit does a typical carrier make on each flight?
Old Aug 14, 2020 | 5:14 pm
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paperwastage
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Originally Posted by dynamiteReady

Which got me thinking... If the average airfare is priced at around $392 (source - https://t.co/J7INAdQEll?amp=1), and the average number of passengers per flight is around 39 flyers (source - https://t.co/VinVtyup3q?amp=1), then the airlines, based on a simple calculation, appear to make roughly $15,288 for each flight... After subtracting the cost of the flight itself ($2770 - $3958). Which looks like an 82 - 74% markup!
that's the downside of just looking at a single flight instead of across the network.

if you want average, look at an airline's annual/quarterly filings.
https://ir.united.com/node/21871/htm...5EB7F689909477

Total revenue per available seat mile ("TRASM") (cents)
MINUS
Cost per available seat mile ("CASM") (cents)

you have to read the definitions/fine-print if the cost includes all-in cost: fuel, landing fees etc



then you run into the the bad decision that United made by leaving JFK
https://www.flyertalk.com/forum/unit...on-2017-a.html
jfk flights by itself were not profitable. but it had an overall positive effect on the network
so leaving reduces the loss of JFK flights, but also reduces profit of the overall network.


or vice versa:
August 10, SFO-LAX at 9am on Monday may be profitable
August 10, SFO-LAX at 1pm may not be profitable.
but as a whole, you need that 2nd flight to offer customers more choice. If you remove the 1pm flight, the high-yield customer may find another airline and make 9am flight not profitable

or you need to fly SFO-FRA year-round so that you get the corporate contract. the winter flights are low-demand and you lose money on those flights, but the overall yearround flight makes money, and induces the corporate clients to fly domestically too

unless you work for an airline, you will never get insight to these specific datapoints. airlines now have a lot of analytics to figure this out, figure which are highyield customers and target/entice them away from other airlines
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