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How Many Pax To Make Profit?  
User currently offlineShanti From Senegal, joined Dec 1999, 61 posts, RR: 0
Posted (13 years 2 months 1 week 4 days 9 hours ago) and read 1542 times:

Do you know how many passengers, in percentage, an aircraft (747, 737, a340)has to bear to cover transport cost and make profit?
I wondered that when it happend to me to fly FLR-MUC (ARJ) and we were 2 (two) passengers....



9 replies: All unread, jump to last
 
User currently offlineCactusA319 From United States of America, joined Jan 2000, 2918 posts, RR: 25
Reply 1, posted (13 years 2 months 1 week 4 days 9 hours ago) and read 1524 times:


It depends on the aircraft and the airline. If the airline has a high cost structure, it may take tmore pax to make a profit on a flight. Also if the aircraft is an older type with a higher operating cost (fuel, maintenance, etc.) they also tend to need a higher load factor to earn a profit.



User currently offlineCfalk From , joined Dec 1969, posts, RR:
Reply 2, posted (13 years 2 months 1 week 4 days 9 hours ago) and read 1514 times:

A lot goes into it - Fuel costs and labor costs in the country of operation being one, and the rate of depreciation allowable under that country's accounting laws being another (granted, it's a non-cash item, but it does hit your P&L).

From what I've seen any average of more than about 70% is considered OK. If you are on a really cheap, price cutter airline like Southwest or Easyjet, that rate may go up to 80 or 90%.

Charles


User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 3, posted (13 years 2 months 1 week 4 days 7 hours ago) and read 1491 times:

I believe Southwest's break-even load factor is in the neighborhood of 54%. I'm not certain, but I AM certain that they do not need an 80 or 90% load factor to make money. Don't know about easyjet.

User currently offlineCfalk From , joined Dec 1969, posts, RR:
Reply 4, posted (13 years 2 months 1 week 4 days 7 hours ago) and read 1486 times:

54%!!!

I'm impressed. But how is breakeven defined? If it's cash cost, I can believe it, but a bargain airline like Southwest had better have better averages than that, I would hope.

Charles


User currently offlineB747-437B From , joined Dec 1969, posts, RR:
Reply 5, posted (13 years 2 months 1 week 4 days 7 hours ago) and read 1483 times:

Every airline must publish what is known as a "Breakeven Load Factor" in their quarterly form 10-Q SEC filings.

Presently, most of the majors average between 65-70% as their breakeven number.


User currently offlineGDB From United Kingdom, joined May 2001, 13184 posts, RR: 77
Reply 6, posted (13 years 2 months 1 week 4 days 6 hours ago) and read 1472 times:

On Concorde's transatlantic scheduled flights, it's about 30-40%, admittedly not exactly a typical service.



User currently offlineVC-10 From United Kingdom, joined Oct 1999, 3700 posts, RR: 34
Reply 7, posted (13 years 2 months 1 week 4 days 6 hours ago) and read 1470 times:
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Nobody has mentioned cargo, the more cargo carried the less pax rqd to break even.

User currently offlineCAETravlr From United States of America, joined Oct 2000, 908 posts, RR: 1
Reply 8, posted (13 years 2 months 1 week 4 days 6 hours ago) and read 1469 times:

It also depends on how much they are charging for the tix. If it is a tightly competitive market, they may have to reduce fares to get any kind of load factor. Therefore, they need even more because they are not getting as much per passenger.


A woman drove me to drink and I didn't have the decency to thank her. - W.C. Fields
User currently offlineB747-437B From , joined Dec 1969, posts, RR:
Reply 9, posted (13 years 2 months 1 week 4 days 6 hours ago) and read 1460 times:

I don't think its feasible today to calculate each individual flight segment for its own break-even factor. The hub-and-spoke system as well as yield management has thrown traditional concepts of a linear relationship between price and costs out the window. The only accurate figure would probably be a systemwide (or at least a regional) average calculation.

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