Avi8r747
Topic Author
Posts: 30
Joined: Fri Apr 10, 2009 10:20 pm

How Airlines Spend Your Airfare

Fri Jul 13, 2012 3:24 pm

Found this article in the WSJ to be pretty interesting. Just a little insight to where all the money from passengers go to and how little extra is left over for actual profit.

http://www.emailthis.clickability.co...Map=viewThis&etMailToID=1643517008

I didn't see this posted yet, so I do apologize if it was earlier.


source from:
wsj.com/blogs
It's an entirely different kind of flying; all together!
 
KDAYflyer
Posts: 152
Joined: Fri Jun 08, 2012 1:37 pm

RE: How Airlines Spend Your Airfare

Fri Jul 13, 2012 6:17 pm

Interesting read. It amazes me how many seats are needed to cover the government regulatory costs and so on.
 
Cabincrewifly
Posts: 228
Joined: Sun Jul 10, 2011 7:47 pm

RE: How Airlines Spend Your Airfare

Fri Jul 13, 2012 6:25 pm

Thanks for posting. Its an interesting article
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planespotting
Posts: 3026
Joined: Sat Apr 17, 2004 4:54 am

RE: How Airlines Spend Your Airfare

Fri Jul 13, 2012 6:36 pm

Quoting KDAYflyer (Reply 1):
Interesting read. It amazes me how many seats are needed to cover the government regulatory costs and so on.

That's what I thought too (FYI for folks who didn't read the article - it's 14 seats worth). I wonder what the breakdown of those 14 seats is for the following:

- Navigational aids (upkeep of GPS system, VOR/ILS, etc.)
- ATC (controller salaries, facilities, radar, communications)
- Ground infrastructure (terminal buildings, runways/taxiways, snowplows, etc.)
- FAA regulatory/administration (FSDOs, airman/aircraft licensing and documentation, NTSB/accident investigation, etc.)

Am I missing any categories?
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BEG2IAH
Posts: 854
Joined: Thu Apr 22, 2004 3:42 pm

RE: How Airlines Spend Your Airfare

Fri Jul 13, 2012 7:03 pm

I had a pleasure to meet the author of this article, Mr. Scott McCartney. He is a real aviation enthusiast and takes his job very seriously. A breath of fresh air in today's media.
 
Avi8r747
Topic Author
Posts: 30
Joined: Fri Apr 10, 2009 10:20 pm

RE: How Airlines Spend Your Airfare

Fri Jul 13, 2012 11:52 pm

Even though this particular artical was based off a hypothetical flight, it still gives you a great insight into how little profit an airline makes, and opens your eyes to literally everything needed to occur to get that aircraft in the air with everyone on board. With almost half the passengers paying for fuel and salary alone.
It's an entirely different kind of flying; all together!
 
traindoc
Posts: 272
Joined: Thu Mar 06, 2008 11:35 am

RE: How Airlines Spend Your Airfare

Sat Jul 14, 2012 2:25 am

Unfortunately John Q Public will not see (or read) this article. The American public wants to pay Walmart prices for air travel, but wants to fly on Nieman Marcus. Yes, the airlines live on a thin line between profit and loss. They are getting smarter and controlling capacity which allows them to do less discounting. However, the frequent and premium traveller are their main source of profit as many of the seats are still priced below cost.

The economy has gotten softer. I have received more emails about fare sales in the last 3-4 months, than I have in the past 2 years. This includes AA, CX, WN, UA, LH and QF.
 
KFlyer
Posts: 317
Joined: Mon Mar 19, 2007 1:05 pm

RE: How Airlines Spend Your Airfare

Sat Jul 14, 2012 2:50 am

This is when you look at a US carrier. If you looked at the finances of an Asian counterpart, you will note that 45%+ of the expenditure is on fuel, nearly 5% on various regulatory costs, about 8-10% on crew salaries and in most cases less than 5% for all the expenditure of corporate/office staff (even including items such as housing, medical etc.).
The opinions above are solely my own and do not express those of my employers or clients.

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