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What's A Typical Break-even Factor For WN  
User currently offlinelv From United States of America, joined Jun 2001, 1991 posts, RR: 0
Posted (3 years 9 months 3 weeks 4 hours ago) and read 2344 times:

Sunday night I flew SMF-LAS and there were only 31 people and 14 bags on the flight (I know the 14 bags because the gate agent came on right before shutting the door and told us "you guys saved about 350 dollars in bag fees"). Today I flew LAS-SMF and there were only about 80 people on the flight. It got me wondering what WN's break even point is. I know there are a lot of different factors in each flight (distance, yield, landing fees, etc) but what is the typical break even point?

3 replies: All unread, jump to last
 
User currently offlineQANTAS747-438 From United States of America, joined Jan 2001, 1922 posts, RR: 1
Reply 1, posted (3 years 9 months 3 weeks 4 hours ago) and read 2317 times:

It's 70-73%. That equates to about 95-100 seats occupied.


My posts/replies are strictly my opinion and not that of any company, organization, or Southwest Airlines.
User currently offlinedl767captain From United States of America, joined Mar 2007, 2539 posts, RR: 0
Reply 2, posted (3 years 9 months 3 weeks 4 hours ago) and read 2313 times:

Quoting lv (Thread starter):

I'm assuming some of that might also be offset by connecting flights to other destinations or paying for a higher fare ticket.


User currently offlineBD338 From United States of America, joined Jul 2010, 701 posts, RR: 0
Reply 3, posted (3 years 9 months 2 weeks 6 days 21 hours ago) and read 2110 times:

Quoting QANTAS747-438 (Reply 1):
It's 70-73%. That equates to about 95-100 seats occupied.

Using some very crude figures I would say that looks very reasonable. Just taking Q1 of 2010 the LF was 75.9% and that achieved an operating margin of 2%. OK, we know LF and margin are not directly relational but when comparing Q1 2009 the LF was 69.9% and a negative operating margin of around 2%. There was a 6 point jump in LF in that period and a 11 point jump in revenue during the same period so on the face of it, it looks lke WN could lose money at less than 70% LF and make money at 75%. Of course if the revenue market was stronger it may also be possible for WN to make money at 70%!


(Note: as stated above this is very rough calculations and I know LF and margin do not necessarily go hand in hand, I know it is possible to have 100% LF and still lose money)


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