Where do you get 5-18%?
The cost for DL
to operate JFK
one-way can roughly be calculated by multiplying the CASM x Number of seats x Distance flown.
So for JFK
, assuming a CASM of .08 (about what we've heard for Song), 199 seats and a distance of 1,070 miles, we get: .08x199x1070 = $17,034. That's a rough cost estimate for DL
to operate JFK
On the revenue side, lets assume DL
has an average fare of $90 each way and an average loadfactor of 70%. That gives us, .70x199x90 = $12,537....this is a rough estimate of revenue for JFK
So, revenue-cost = profit (a very crude equation), $12,537-$17,034 = $-4,497. Using these approximations, DL
is then losing $4,497 per flight.
Again, this is a very rough estimate. It doesn't take into consideration other revenues (food sales, cargo) and I'm just using a rough estimate for CASM, average fare and load factor. However, Parker's numbers can be duplicated without making any insane assumptions, so his hypothesis that Song is bleeding on the JFK
-Florida routes is feasible.
Also, even if you multiply a loss of 4-7 thousand across all of Song's schedule (142 flights), you will not get 7 million a day. 142x(4-7,000) = $568,000-$994,000 per day. Of course, I would not apply this loss across all routes, as some Song routes perform better than others. I wouldn't be surprised if the JFK
-Florida routes were some of the worst performers given the intense competition with JetBlue.