When is a route profitable?
Jan 14, 2013 | 11:21 am
#1
Original Poster
Join Date: Oct 2005
Location: TPA / HAM
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Posts: 293
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?
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?
Jan 14, 2013 | 11:37 am
#2
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Sorry, Couldn't Resist.............
Jan 14, 2013 | 11:41 am
#3
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Jan 14, 2013 | 11:46 am
#4
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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.
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.
(ex.KWI)
Jan 14, 2013 | 11:54 am
#7
Moderator: Manufactured Spending
Join Date: Jul 2011
Posts: 6,707
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)
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)
Jan 14, 2013 | 11:57 am
#8
Join Date: Dec 2009
Location: Montrose, CO
Programs: United 1K MM, Marriott LTPP
Posts: 550
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?
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?
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.
Jan 14, 2013 | 2:04 pm
#10
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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.
If it's a non-American airline it involves Using Science!(tm). And a rubber chicken.
Jan 14, 2013 | 2:10 pm
#12
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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.
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.
Jan 14, 2013 | 2:30 pm
#13
Join Date: Mar 2000
Location: Santa Cruz, CA USA
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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.
