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wxman11
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Posts: 98
Joined: Mon Jan 17, 2011 9:33 pm

Cost of flight benefits

Sat Feb 20, 2021 7:05 am

Hello folks,

I have a question. I've always believed that flight benefits have a cost to the airlines. Not sure where I heard it, read it, however, does it cost the airlines for providing employees with flight benefits??
 
davidjohnson6
Posts: 1784
Joined: Mon Jun 20, 2016 10:10 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 7:15 am

At the absolute minimum, there is a need for additional fuel to transport the extra passenger, so there is a real non-zero cost to an airline

That said, does the provision of services to employees at minimal cost to an employer allow airlines to save money by paying lower salaries than otherwise ? Perhaps a number of cabin crew when young might not have taken a job with an airline on modest pay, had the prospect of 'see the world for free' not been dangled before their eyes while naive and impressionable. Once in a stable job, it's easy to get comfy and put up with pay lower than might be achieved on a different career path

Thus the savings on salary may well outweigh the relatively low cost of providing standby transport
 
COSPN
Posts: 1849
Joined: Fri Oct 12, 2001 6:33 am

Re: Cost of flight benefits

Sat Feb 20, 2021 8:58 am

I think about 94% of Airline Employees would quit if there were no free flights . It is one of the few things that make up for the long hours and working weekends , the ability to see the world and aircraft for oneself and to understand what our “product” is from Manila to Boston ,Hawaii Dubai ,Lima , Hong Kong and to try to understand what airline services bring to the planet can not be easily explained or underestimated
 
n757kw
Posts: 453
Joined: Sat Sep 13, 2003 3:08 am

Re: Cost of flight benefits

Sat Feb 20, 2021 9:17 am

Free tickets what is that? My carrier offers ZED/ID90/ID50 for the employee travel. Even on business travel we pay the taxes go figure.

N757KW
 
BBDFlyer
Posts: 49
Joined: Tue Dec 18, 2018 3:14 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 9:27 am

n757kw wrote:
Free tickets what is that? My carrier offers ZED/ID90/ID50 for the employee travel. Even on business travel we pay the taxes go figure.

N757KW

I am sorry to hear that. My company offers 100% free travel with free First/Business class upgrades if available. We only pay departure taxes from international departures returning to the US. These benefits are extended to spouses and children. Parents do pay a fee and taxes.
 
VMCA787
Posts: 275
Joined: Fri Sep 04, 2020 9:31 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 10:27 am

I have to say flight benefits were a big part of the attraction when I got hired 30+ years ago. However, over time that outlook certainly changed. Now that I am retired, and even have flight benefits, I really don't use them. To be honest, over the last 20 years, the value of staff travel had decreased dramatically to the point where it really isn't worth it. Staff are put on last, and if there is room you go. If there is no room, you wait. So, for me and my family, unless you had a very flexible schedule, read no kids or working spouse, the value of staff travel was pretty minimal.
 
Noshow
Posts: 2942
Joined: Wed Jun 15, 2016 3:20 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 11:29 am

Most staff travel seems to be permitted on a space available base only. The cost must be minimal if no paying passenger is bumped and all seats in demand are sold.

However some business class sections seem to fill up with staff friends and family early on so airline frequent travelers are left behind instead of getting expected/promised upgrades with their miles. This might lead to less perceived value of their miles and less future business from their side as sort of hidden cost?
 
Kraken27
Posts: 13
Joined: Thu Sep 24, 2020 8:54 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 12:07 pm

The airline my girlfriend works for (European based) has an official policy that staff using benefits get boarded last. However, as with many things, if it's off duty crew who happen to know the ground staff on duty at the boarding gate on the day, the rule book is out of the window. On certain routes it's quite obvious who the non-rev off-duty staff are - some of them are not discreet.

The airline in question did have big problems a couple of years ago with non-rev off duty staff drinking the bar carts dry of certain items. They have clamped down on this big-time now, to the extent staff have been dismissed for not following the non-rev travel rules. Basically if they are non-reving they are supposed to keep a very low profile onboard, get whatever meal choice is left after revenue passengers have made their selection etc.

I have been travelling with the girlfriend (yes, on non-rev) in business class and there was a Z-lister "celebrity" sat next to me. The crew were all over him like a rash - even giving him bottles of wine & champagne from the drinks cart to take with him - they even wrapped them in newspaper to disguise them. Unfortunately for the crew, our tickets did not show as non-rev on the manifest & my girlfriend was witnessing everything. Two dismissals as a result.
 
RJNUT
Posts: 1992
Joined: Thu Dec 30, 1999 1:58 am

Re: Cost of flight benefits

Sat Feb 20, 2021 12:28 pm

there used to be considerable administrative costs associated with "interline" offices for pass travel, but it has seemingly been streamlined down to a nominal amount thru vastly improved technology.
 
Galore
Posts: 36
Joined: Fri Apr 17, 2020 12:43 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 1:05 pm

COSPN wrote:
I think about 94% of Airline Employees would quit if there were no free flights . It is one of the few things that make up for the long hours and working weekends , the ability to see the world and aircraft for oneself and to understand what our “product” is from Manila to Boston ,Hawaii Dubai ,Lima , Hong Kong and to try to understand what airline services bring to the planet can not be easily explained or underestimated


I always found this line of thought strange. I can understand if that’s a one-off reason but not if that is the main motivation for 94%.

I mean, I work for a tech company with pre-Covid regular business travel. The pay is VASTLY better than what my flight attendant acquaintances make and I get a huge amount of frequent flyer miles. So the pay plus the miles allow me to travel all I want also. And that’s not a unique situation.
 
gwrudolph
Posts: 598
Joined: Sat Sep 13, 2008 3:46 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 1:26 pm

I used to work for an airline. In the early days, it was fairly easy to get on flights. By the end of my career with that airline, it was tremendously difficult with higher load factors, and became very stressful for me. When I went on vacation, I was nervous about getting on (especially for a cruise or something), then once I did get on, I started thinking about getting back. I ended up buying tickets toward the end just for peace of mind.

With today’s pre-COVID load factors, even as a revenue passenger, standing by for an earlier flight was challenging.

Bottom line, I liked the benefit, but it is best for a retiree who has unlimited time.
 
jetmatt777
Posts: 4823
Joined: Sun Jun 26, 2005 2:16 am

Re: Cost of flight benefits

Sat Feb 20, 2021 2:00 pm

I buy tickets now if it is important. But it is nice to have a free option if I want to go somewhere but it is not necessary. For example a spur of the moment trip to somewhere random that happens to have plenty of open seats.

Not sure of the true cost to the airline, but it can't be that much. The airplane is going anyway, the additional weight does require additional fuel, but not a lot.

If you look at an airline's CASM it can for example cost 15 cents per seat mile, on a 750 mile flight that is $112.50. But at departure time that seat is going flying whether or not a butt is in it; so if a nonrev sits there they didn't cost the company $112.50. The revenue management department cost the company $112.50. It's a nearly expired product that is already paid for; it is no different than a bakery giving out unsold loaves of bread to its employees at the end of the day. They baked too much and now it will be expiring; better to have it eaten by staff than throw in the trash. At that point in time, the cost to the bakery is the same whether it goes in the trash or goes home with a worker.

If you look at it in that mindset it is easy to see that it is a cheap benefit to give away that costs very little, but has a large apparent value to employees. The airline bought the resources to provide 150 seats on a particular route, but was only able to sell 130 of them. The extra 20 are already paid for. Seating an employee in one of them doesn't change the cost structure in any meaningful way.

If you do some back of the envelope math for fuel cost, you can come up with about $20-30 of fuel per seat for a 2 hour narrowbody flight; but even then that is hard to really say what the nonrev cost is because most of that fuel is flying anyway whether or not someone sits in that seat. It probably realistically costs the company an additional $5 or less to board a nonrev in most situations as most costs are already accounted for at departure time.
 
mia977
Posts: 6
Joined: Thu Feb 14, 2019 1:46 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 2:35 pm

Although minimal there is definitely a cost to the airline for providing non rev privileges. You have to figure in the extra cost of fuel burned by having an additional 180 pounds of meat in a seat. Would be nice if a load planner on this site could pine in on the estimated fuel burn for each additional passenger. You also have the additional cost of catering items (much smaller now thanks to Covid!) plus some additional staff costs to service employees when travelling and administration to run the whole program.

I fly about 25 flight segments per year and had to estimate the value of my non-rev benefits when exiting my airline job several years ago. At the time I figured the value of the benefit to me was about $10,000 per year. I imagine most non-revs travel a lot less than this, say 10 flight segments per year giving the benefit a ruff value of around $4000. Long story short the benefits are great but if your non-airline job is paying you $5000 or more than its better to leave your airline job and just buy confirmed tickets. Would be funny if one could create non-rev benefit to price on the stock market. With fares so low right now that stock would probably be 1/4 of the value it was back when fares were at a normal level pre-covid.
 
PI4EVR
Posts: 215
Joined: Sat Jun 01, 2019 4:29 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 2:39 pm

I earned lifetime travel benefits after 25 years of full time service. My airline has a liberal pass travel policy and is a great benefit I value very much.
As a retiree I am more flexible to pick and choose travel options that may not be available to active employees or those commuting. Reduced fare tickets are also available as a great backup plan to insure I get where I'm going. Seat selection, frequent flyer miles and free baggage is a big perk to buy those type tickets. Benefits are available to immediate family members, but I'm single so "Marry Me and Fly Free." :airplane: I do not however, make use of "buddy pass" options to offer family or friends.
Taxes are paid for international travel and small "service charges" apply for Business and First class travel that can be charged on a credit card.
Employees and retirees have access to a computer system link to check flight availability and to list for the desired flight/s you want to use. Airport staff are always helpful "rolling you over" to the next flight/s if you get bumped.
Did I earn it? I certainly like to think I did, working for a company for 32 years of what was my dream job. I worked all the nights, weekends, holidays, had the low pay and relocated 4 times at company request over all those years, but I loved every minute of my airline career. The skills I learned carried me to other positions once I left the company and until I retired at aged 67.
I lived my dream and I live it all over again every time I step foot on my airline.
 
sixfootscream
Posts: 157
Joined: Mon Jun 13, 2016 12:31 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 2:41 pm

My former employer provided us wtih on free ticket a year. Even for ID90/50/ZED you still pay a small fee plus taxes. If the flight is full you stay behind. If it looks like it will be full you waited till check-in closed. If passengers didn't turn up, you got their seat.
For the airline the cost is minimal. Since they anyways carry additional meals and filling an empty seat is stil better than leaving it empty. In my case I could not opt for first and business class. Because of my rank within the company.
 
jetmatt777
Posts: 4823
Joined: Sun Jun 26, 2005 2:16 am

Re: Cost of flight benefits

Sat Feb 20, 2021 3:04 pm

mia977 wrote:
Although minimal there is definitely a cost to the airline for providing non rev privileges. You have to figure in the extra cost of fuel burned by having an additional 180 pounds of meat in a seat. Would be nice if a load planner on this site could pine in on the estimated fuel burn for each additional passenger. You also have the additional cost of catering items (much smaller now thanks to Covid!) plus some additional staff costs to service employees when travelling and administration to run the whole program.

I fly about 25 flight segments per year and had to estimate the value of my non-rev benefits when exiting my airline job several years ago. At the time I figured the value of the benefit to me was about $10,000 per year. I imagine most non-revs travel a lot less than this, say 10 flight segments per year giving the benefit a ruff value of around $4000. Long story short the benefits are great but if your non-airline job is paying you $5000 or more than its better to leave your airline job and just buy confirmed tickets. Would be funny if one could create non-rev benefit to price on the stock market. With fares so low right now that stock would probably be 1/4 of the value it was back when fares were at a normal level pre-covid.


The benefit to you isn't the cost to the airline though. Figure this, most non-employee (OAL, buddy pass, etc) passes are figured at the ID90 rate. That is essentially 10% of the price of a ticket. So a $300 ticket would be rated at around $30 + tax. So figure the actual cost to the airline for non rev travel to be around 10% of a normal ticket cost.
 
BBDFlyer
Posts: 49
Joined: Tue Dec 18, 2018 3:14 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 3:08 pm

I have 4 children who are homeschooled and my wife loves traveling with them. We travel so much (pre-COVID) that without flight benefits, I would not be able to afford even a fraction of the amount of flying that we do.
 
BBDFlyer
Posts: 49
Joined: Tue Dec 18, 2018 3:14 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 3:23 pm

Noshow wrote:
Most staff travel seems to be permitted on a space available base only. The cost must be minimal if no paying passenger is bumped and all seats in demand are sold.

However some business class sections seem to fill up with staff friends and family early on so airline frequent travelers are left behind instead of getting expected/promised upgrades with their miles. This might lead to less perceived value of their miles and less future business from their side as sort of hidden cost?

In most cases, non-revenue upgrades are after frequent flier upgrades. Positive space travel for employees (meaning traveling to work on company time) may result in a higher upgrade priority or mandatory upgrade (for example pilots deadheading from or to a longhaul destination).
 
PI4EVR
Posts: 215
Joined: Sat Jun 01, 2019 4:29 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 3:27 pm

I think the costs for a pass travel program is charged as part of the total benefits package offered to active and retired employees. I was once told it was simply "part of doing business" such as medical benefits, insurance and retirement plans offered. These "administrative" expenses are charged and accounted for in a total employee expense to the bottom line.
Costs for non revenue travel has always been considered "fixed" as the airplane is already set to fly, and a pass rider will only be boarded if empty seats are available right at departure, so equations for fuel, crew expenses, aircraft depreciation, airport charges etc., are not factored in to a travel program.
 
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wxman11
Topic Author
Posts: 98
Joined: Mon Jan 17, 2011 9:33 pm

Re: Cost of flight benefits

Sat Feb 20, 2021 11:10 pm

I see.... We all love those flight benefits. Although, there are times it can be stressful, worrying about if I'm going to get on the flight even if you checked the loads and they were ok. Its those last minute game changers (i.e. 1 flight cancel so, those pax get rerouted onto yours, etc.). I know some airlines do offer free travel for non-rev domestically. Meaning, I remember back some 15 yrs ago, the airline I worked for, I could fly for free travel in the US only whereas if you departed the US, you had to pay the taxes. Fair enough for having the cheapest option available for employees. Or how we have ZED agreements with OAL, although for the airline I work for, we don't have a ZED agreement with SQ despite being alliance partners.

I wonder how, when establishing a ZED with OAL, what cost is there??
 
SoCalPilot
Posts: 174
Joined: Fri Mar 17, 2017 4:37 am

Re: Cost of flight benefits

Sun Feb 21, 2021 10:22 pm

Noshow wrote:

However some business class sections seem to fill up with staff friends and family early on so airline frequent travelers are left behind instead of getting expected/promised upgrades with their miles. This might lead to less perceived value of their miles and less future business from their side as sort of hidden cost?

This isn't true at any airline I've worked at, and I doubt its the case at any others. If a paying customer is able to upgrade to a premium class and exercises that option, then they will get a premium seat over nonrevs.
 
hoons90
Posts: 3927
Joined: Wed Aug 01, 2001 10:15 pm

Re: Cost of flight benefits

Mon Feb 22, 2021 1:58 am

wxman11 wrote:
Or how we have ZED agreements with OAL, although for the airline I work for, we don't have a ZED agreement with SQ despite being alliance partners.


I could be mistaken, but I believe SQ only does ID75 with OAL including Star partners.
I don't think Air China participates in the ZED program either.

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