A380 profit sector question
 

Had an interesting discussion today with my airline colleagues.

Take for example a return flight from Dubai to Bangkok on the a380.

Economy 399 seats x 1000 usd so 399,000 us
Business 76 seats x 2000 usd so 152,000 us
First 14 seats x 4,500 usd so 63,000 us

So as an general estimate is passenger fares is approx 614,000 usd or 307,000 one way flight.

Now my question is. From that 307,000 usd how much does EK actually make after meals, staff costs, fuel etc. I know there is extra like cargo etc but curious to how much EK make and how many years to recoup the actual a380 costs. I would say 15-20% per flight. Any one think different?

This is only a general question so I am sure my figures are off. Just curious how much EK would actually make per flight and how many years it takes to recoup the cost of the actual a380.

The fastest way to become a millionaire is to be a billionaire and invest in an airline.

While there is a difference between accounting profits and true profits, few airlines make a profit, and then it is generally well below the cost of capital.

For Dubai in general it's not really there to make a profit

The other way to look at it is that if EK could replace the 76J and 14F seats with 282 Y seats on the upper deck, drop Y fares by $100 to $900, it would still make the same money. For some sectors, there may be more demand in Y than J/F so it might make sense...

I don't understand why people would think this???

A tiny country/city-state, practically no oil, and had to refinance billions of dollars of debt, needed a bailout from it neighbor, for which it still selling assets, and has to spend 10-30 billion more in projected expo projects (direct and indirect infrastructure costs)...

and they would do this all for no profit??? why!!!

Thanks for the comments but can anyone answer how much guy would think they would make off each flight?

There really is no simple answer to your question.

Airlines use sophisticated yield management systems which take account of both historic trends and forward booking patterns, but the reality is that no two flights are ever the same. And that's not just because load factors will vary by day/season (and sometimes dramatically so) but because revenue profiles will be made up of so many different fare types on any given sector : full fare tickets, FIT fares, mileage redemptions, staff duty travel, annual leave tickets, staff family concessions, AD & ID tickets, route incentive deals, and all manner of other concessionary or 'guest' travel (eg press/industry journos etc etc ...... the list is almost endless ....).

And once you've taken account of all that, you'll need to get a handle on EK internal costs (good luck with finding out such stuff !!) not to mention airport fees etc etc etc .....

I believe that you forgot income from cargo...

You're an amateur making an uneducated guess.... I'm sorry to say but that's not very useful :-).

If you want answers try reading the financial reports the airlines produce and start following the industry.... and you will find it's not an easy calculation, even for the airlines themselves. Your question therefore is rather pointless. So many variables and assumptions about future costs/ticket prices/residual values/etc. But for sure EK intends to make a profit on these planes and their routes as a whole, otherwise they most likely wouldn't do it.

Just read a single story about EK's A380's and you will see that it's no use asking the question: http://www.ainonline.com/aviation-ne...etirement-plan
You're trying to find simplicity where there is none.

Yes I am a amateur. It was a general question if you read my original message. I don't need your attitude. Thanks.

One complexity is that not all passengers on a flight just travel from DXB to BKK; a significant proportion of them are transit passengers (especially true to a network carrier like EK).

So when you say 399 Y passengers bring in $1000 x 399 revenues, not all the money is 'earned' from this flight. One the other hand, most cost (aircraft, fuel, crew, food, airport changes, etc.) is incurred per flight. Looking at it from an aggregate, network perspective will give you a more meaningful answer, and you can get it from the airline's annual reports.

Missed the smiley did you?

Ok, let me rephrase... you don't know a thing about what you are talking about, and your calculations couldn't be more simplistic or incomplete. Good luck with your quest for some guesses. You need information that's simply not publicly available other than a few generics in the airlines reporting and in the trade magazines.

What an a s s !! The OP clearly laid out that they didn't know what they were taking about hence why they were asking for help. Then they get attitude and arrogance because of it? Wow. Welcome to friendly FT.

If you can't help the OP what is the point of stating obvious facts about the OPs knowledge level which, the OP already disclosed?

Sorry OP, I don't know but hope someone here can help you!

:confused:

Not cool, dude(tte). He clearly is not passing himself off as an expert, and is trying to learn. Perhaps the wrong forum, as few people here seem to be insiders, but he asks interesting (albeit simple) questions.

Hey guys it's all good. As I mentioned it was a general question at the start and was curious after chatting with my friends. I dont need the attitude from rtw1, I won't fight back as I am not on his level. I am well mannered. Blocking is more than enough. Merry christmas to all.