When is a route profitable?
 

I am flying between Hamburg and the US since 1991. When I started, Delta had a connection Hamburg – Atlanta. The plane was often quite empty, finally the connection was discontinued.

Since 2005 CO (UA) is flying Hamburg – Newark and I have been on it from day one.

For a while Emirates was also flying Hamburg – New York (forgot what Airport), but that was also discontinued.

So, my general question is: When is a route profitable?

Of cause it’s nice for me as a PAX when the plane is empty, upgrades go through or I can sleep in an empty exit row.

But at what point would an airline start losing money and eventually pull the trigger?

Sorry, Couldn't Resist.............
 

:rolleyes:
When the flights are operated by Southwest.
:rolleyes:

I though United is the new Southwest. You pay exta for everthing and if you have a creditcard from us, you are a top customer as we earn from you all the time.

It is profitable when most people are paying fares that are profitable on a per seat basis.

Now that you've told us upgrades are easy to Hamburg, we will book the lowest possible (i.e. unprofitable) upgradable fares to Hamburg, and now the route will be unprofitable. Serves you right. :D

Usually it full, often upgrades do not work out.

Just today it was quite empty.

But in general, any idea how airlines plan this?

When the belly is full of profitable cargo :) (ex.KWI)

It depends on many factors, but the top three are:

1. load (percentage of seats that are taken)
2. yield (percentage of passengers that are paying higher fares)
3. cargo (sometimes a passenger flight that is unprofitable becomes profitable if there is high-yield cargo on board)

would imagine that a route might not be profitable every day on any given day but overall could be. If an airline pulls the number of flights I imagine they lose gates. Much harder to get back than to give up I am sure.

Don't forget about opportunity cost too.

A route may be nominally profitable, but if the aircraft deployed on it can be used to serve another route more profitably, the flight may still be cancelled.

Well, if it's an American airline, the planning involves cats, entrails, a full moon, a dart board, a rubber chicken, and two reps from each of management and a union.

If it's a non-American airline it involves Using Science!(tm). And a rubber chicken.

and also the route as a stand alone might not be profitable but is making a good contribution when onward connections are taken into account.

It's profitable when the cost of operating the flight is less than the amount of money the flight brings in.

On a route like that I would bet that's going to come more from Cargo than it is passengers,so don't assume that because there are empty seats they are not making any money.

Obviously there can be a wide range and lots of variation, as stated above, but I have heard that, if you are looking for some "average" - with a very wide standard deviation - an average load factor of about 70-75% in coach is a good starting point.

Marginal Revenue > MAX (Marginal Cost, Opportunity Cost)