No YYC From Canada, joined Jul 2000, 73 posts, RR: 0 Posted (12 years 8 months 3 weeks 3 days 8 hours ago) and read 1274 times:
At what point does an airline consider a certain flight to be profitable? Of course, the main idea is to put as many bums in seats as the aircraft can hold. But not every single flight can be sold out. Yes, there are your high revenue 1st & business class travellers and then your low yield tourists. Would anyone know what the airlines consider to be a "good" load factor. These questions stem from Air Canada's recent decision to drop YUL-YEG flights, eventhough the flights have been operating at 71% capacity. AC claims that this route was extremely unprofitable for them!
Early Air From United States of America, joined Jan 2001, 611 posts, RR: 1 Reply 1, posted (12 years 8 months 3 weeks 3 days 8 hours ago) and read 1247 times:
It really all depends, you factor the a/c, length of flight, airport charges ect.. and add them all together. That flight you mentioned can loose money for AC in many ways, when you add in stuff like extra gate rentals at the airport and if the tickets are cheap the flight may not be profitable. I know what Southwest sais that they need at least 70 people aboard the aircraft for the flight to be profitable.
Ramperjoe From United States of America, joined Mar 2001, 13 posts, RR: 0 Reply 4, posted (12 years 8 months 3 weeks 1 day 12 hours ago) and read 1177 times:
A flight operating at 71% average capacity and AC is saying that the flight isn't profitable! If an airline like AC can't make money on a flight like that then there has got to be something wrong with them. A 71% load factor is pretty good and according to OAG the aircraft used on the YUL-YEG route is a 737-200. It's not like you have to fill 200+ seats to make money. I think AC is making excuses for pulling the route. They probably don't have enough aircraft to fulfill all of their routes. So, they pull aircraft from the backwater routes. Airlines tend to cut service first from areas that won't make a big stink about it (i.e. the business community). I think AC is giving the people on this route the shaft.
Airbusluver From United States of America, joined Feb 2001, 155 posts, RR: 0 Reply 6, posted (12 years 8 months 2 weeks 6 days 11 hours ago) and read 1134 times:
For a route to be profitable, of course, the revenue must be more than the cost. Here is how airlines can calculate the fare for a route.
An airline has a CASM of 9 (CASM is Cost per Available Seat Mile--meaning how much it costs an airline to fly one seat one mile)
So, say on an 800 mile flight, multiply 800 times 9, and you get the cost of the trip. And if you wanted to make sure you make money on a flight with a 50% load factor, multiply 800 times 18. Of course, the CASM is just an average, and is higher on short flights, and lower on longer flights, because takeoffs and climbs cost more than level flight. A good load factor is usually about 62-67% for an average.
EliBen From , joined Dec 1969, posts, RR: Reply 7, posted (12 years 8 months 2 weeks 6 days 11 hours ago) and read 1121 times:
Profits are simply revenues less cost. Period.
You can have a plane full of low-fare-paying pax (100% load factor) and lose money on the flight.
There are a couple of ways to calculate profitability and it is beyond the scope of this forum.
As to load factors - you have to calculate your break-even load factor that is, per the existing revnue, at what point you will break even. Any number higher than that one is profitable so as you can see - a certain percentage load factor caannot be judged in itself.
CPDC10-30 From United Kingdom, joined Feb 2000, 4761 posts, RR: 25 Reply 8, posted (12 years 8 months 2 weeks 6 days 10 hours ago) and read 1110 times:
It also depends on the type of fares that the passengers are paying. Canada 3000 would probably be losing money on any route with less than 75%...while some majors can profit with 50% or less loads if there are premium fares being paid. Cargo also figures in.
Ramperjoe From United States of America, joined Mar 2001, 13 posts, RR: 0 Reply 9, posted (12 years 8 months 2 weeks 6 days 9 hours ago) and read 1093 times:
As an expatriate living in the states, I find it very sad that the AC reputation is going down into the dumps pretty quick. I used to really enjoy flying with AC and always looked for the red Maple Leaf with the circle on the tail whenever I was abroad. It appears that Air Canada is trying to cut service to all the areas it doesn't consider important enough. It's one thing if nobody takes your flight but it another if the flight is being strongly supported