Grimey From Ireland, joined Jun 2005, 434 posts, RR: 5 Posted (7 years 8 months 1 week 3 days 8 hours ago) and read 3590 times:
What is the amount of passengers that has to be on an aircraft till the airline makes a profit? I would take it that an airline would never have it's breakven point at 100% capacity because not every single flight gets full up, I would be thinking it would be 75% upwards.
EMBQA From United States of America, joined Oct 2003, 9286 posts, RR: 13 Reply 1, posted (7 years 8 months 1 week 3 days 8 hours ago) and read 3571 times:
Quoting Grimey (Thread starter): What is the amount of passengers that has to be on an aircraft till the airline makes a profit? I
Every aircraft and airline is different.
"It's not the size of the dog in the fight, but the size of the fight in the dog"
Shamrock_747 From , joined Dec 1969, posts, RR: Reply 2, posted (7 years 8 months 1 week 3 days 8 hours ago) and read 3570 times:
Completely depends on the yields.
For example on a hypothetical BA route, having a 100% load of restricted tkts such as N/V/D/I/A and mileage redemptions may not make any money whilst 50% load with every pax holding a full fare Y/W/J/F class tkt may well be profitable.
B6sea From United States of America, joined Aug 2005, 340 posts, RR: 0 Reply 3, posted (7 years 8 months 1 week 3 days 8 hours ago) and read 3558 times:
Quoting Grimey (Thread starter): I would take it that an airline would never have it's breakven point at 100% capacity
Tell that to FlyI, but it depends on the airline, some, like flyI are above 100% hence talk of them going under some are quite low. What are SW's and B6's???
WhiteHatter From , joined Dec 1969, posts, RR: Reply 4, posted (7 years 8 months 1 week 3 days 7 hours ago) and read 3502 times:
It depends on the route flown, airport charges and so many variables you can't put a figure on it. Fares are just one part.
FR have frequently said that they could potentially fly a route with passengers at zero fare charged and pay for it with incidentals if the business model could be done right. Stuff like inflight sales and hotels/insurance. Other airlines can fly a route with every single seat full and lose money on it if they can't get the yield right.
Some of the lowcosts frequently mention a 70% figure but that's a figure averaged across flights with many variables factored in. Other carriers could possibly turn a buck on a longhaul with all the premium seats full and nobody at all in economy.
Venezuela747 From United States of America, joined Jan 2004, 1407 posts, RR: 5 Reply 6, posted (7 years 8 months 1 week 3 days 6 hours ago) and read 3446 times:
Do airlines measure their profit peraircraft or as a whole? It does not make sense....I mean maybe a UA domestic flight on a B757 was really empty and was a loss but they make up for it with a full daily B744 to Asia....does that make sense to anyone?
Snaiks From Panama, joined Mar 2005, 214 posts, RR: 0 Reply 8, posted (7 years 8 months 1 week 2 days 20 hours ago) and read 3341 times:
you also have to take in consideration freight, many airlines can fly completeley empty, and would still make money because they are flying freight to other places, ie. mail, overnight deliveries, etc
Sidishus From United States of America, joined Oct 2004, 519 posts, RR: 4 Reply 9, posted (7 years 8 months 1 week 2 days 19 hours ago) and read 3326 times:
Quoting Grimey (Thread starter): What is the amount of passengers that has to be on an aircraft till the airline makes a profit? I would take it that an airline would never have it's breakven point at 100% capacity because not every single flight gets full up, I would be thinking it would be 75% upwards.
You are venturing into the complex and murky world of Revenue Management. Master this Black Art (some call it a discipline), and you could make a fair bit of money...Good luck on your journey.
777ER From New Zealand, joined Dec 2003, 11307 posts, RR: 17 Reply 10, posted (7 years 8 months 1 week 2 days 19 hours ago) and read 3306 times:
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Break even for each airline doesn't always mean passengers, it also means cargo, a perfect example is EK on the Trans-Tasman (New Zealand - Australia). EKs profits from the Trans-Tasman came mostly from its cargo operation
NZ1 From New Zealand, joined May 2004, 2188 posts, RR: 27 Reply 11, posted (7 years 8 months 1 week 2 days 18 hours ago) and read 3270 times:
AIRLINERS.NET CREW FORUM MODERATOR
Quoting 777ER (Reply 10): Break even for each airline doesn't always mean passengers, it also means cargo, a perfect example is EK on the Trans-Tasman (New Zealand - Australia). EKs profits from the Trans-Tasman came mostly from its cargo operation
Thats right. EK still make a profit flying SYD-AKL with only 30pax on board, due to the freight being carried.
Sidishus From United States of America, joined Oct 2004, 519 posts, RR: 4 Reply 12, posted (7 years 8 months 1 week 2 days 18 hours ago) and read 3262 times:
Quoting Sidishus (Reply 9): You are venturing into the complex and murky world of Revenue Management. Master this Black Art (some call it a discipline), and you could make a fair bit of money...Good luck on your journey.
Luvflng From Costa Rica, joined Nov 2000, 178 posts, RR: 0 Reply 13, posted (7 years 8 months 1 week 2 days 15 hours ago) and read 3205 times:
Well, the above answers are correct but neither provides the exact formula.
In case you want to find out what the Break Even Load Factor (BELF) is you need this information:
A) Total Operating Expenses
B) Total Operating Expenses
C) ASM - Available Seat Miles (For Europe ASK )
D) RPM - Revenue Passenger Miles (For Europe RPK )
Make sure that you stay either in miles or kilometers
E) CASM = B/C
F) YIELD = A/C
G) BELF = CASM/YIELD = E/F (This will give you the percentage)
Now, you can do that per aircraft fleet, for example find out BELF for the fleet of A 330, however, you would need the A) B) C) and D) information just for that fleet and unless you have access to some specific databases such as O&D or Form 41 for US Airlines (don't think something like that is available in Europe yet) then you can compute the BELF. Airlines for sure do these types of computations as they have the data readily available.
You can plot multiple airlines with the BELF and their current Load factor and see if they are making money. At least in the US for the past 3 years, BELF is higher then their LF (duh) spelling losses for them.
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