it's profitable and efficient because of Economies of Scale (it's an economic term that says when goods or services are produced in larger quantities the overall unit cost goes down).
When American made DFW
into what it is (ultra-super mega hub) they thought at first that they should actually de-hub from DFW
. This was in part because their workers weren't doing much for an hour or so at a time and then for about 90 mins they would work, and then stop working again, and so on... they thought it might be more efficient to keep the same amount of flights but just average them out over the whole day. Bob Crandall had one of the top VP
's at American do a study and he actually came up with the exact opposite conclusion: to obtain maximum efficiency, American actually needed to increase the number of flights to and from DFW
during the day. Common sense would make you think that increasing the number of flights during the day would add to your costs, and it does to a point. But when you think about it, maximizing the output of your aircraft and employees can only make your overall costs go down, which makes your cost / seat mile go down, which brings the break even load factor down, which makes your profits go up.
for example (the numbers are all guesses)
8 flights/day DFW - ORD all MD80's (1200 seats, 962,000 total seat miles)
Aircraft cost: $50,000
Total Cost: $70,000
cost per seat mile: 7.2 cents/ mile
16 flights/day DFW - ORD all MD80's (2,400 seats, 1,924,000 total seat miles)
Aircraft Cost: $100,000
Total Cost: $134,000
cost per seat mile: 6.9 cents/ mile
so in this example, it is .3 cents per seat mile cheaper to fly 16 flights a day as it opposed to 8. it's a rough example but it gets the point across.