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I was computing the hypothetical profitability of commercial airline flights and it seems to be pretty extreme. For example, looking at the Boston-DCA shuttle, pro-rating all costs to the just the flight itself using conservative figures I came up with the following:

aircraft: A320
distance: 346 nautical miles
fuel usage: 6500 pounds

fuel: 3800
maintenance: 2000
crew: 1200
hangar: 900
insurance: 400

Total costs: 8,300

passenger count: 150
ticket charge: 200

Total revenue: 30,000

Based on these figures, profitability of this route seems to be about 350%, i.e., more than tripling your costs on every flight. Even if we allow for tickets of $100 each, it is still almost a 100% profit.

Am I missing something, or are these figures in the right ballpark?

THIS IS NOT A DUPLICATE OF long-haul flight costs. That post is for LONG HAUL flights. This is a shuttle. That post concerns a completely different aircraft with costs amortized ANNUALLY. This is post is about PER-FLIGHT profitability, not ANNUAL profitability.

ALSO: This post asks about PROFITABILITY on this route, not just costs. It includes REVENUE. I am not asking general profitability; I am asking about this calculation for profitability on the route in question using the aircraft in question (A320).


marked as duplicate by Pondlife, Farhan, DeltaLima, reirab, SentryRaven Dec 30 '14 at 20:48

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    $\begingroup$ You need to include airport fees and several other related expenses. A new route initiation takes a lot of time, money and lobbying. A lot of regulations have to be maintained. Then you need to add executives', lawyers' and flight crew's salaries. $\endgroup$ – Farhan Dec 30 '14 at 19:16
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    $\begingroup$ Your cost calculation doesn't include anything like infrastructure (ticketing, baggage, ground support, reservations) and other GA costs. $\endgroup$ – douggro Dec 30 '14 at 20:07
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    $\begingroup$ Additionally, your calculation doesn't include the amortization cost of the aircraft itself. $\endgroup$ – reirab Dec 30 '14 at 20:34
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    $\begingroup$ Also, the revenue estimate is probably way off. It seems very unlikely that the airline is averaging \$200/seat for a single 350 nm flight segment. I usually get round-trips with each way being twice that distance for between \$200 and \$300 USD. Finally, even if the figures were correct, 30,000 - 8,300 = 21,700 which is 260% of 8,300, not 350%. $\endgroup$ – reirab Dec 30 '14 at 20:47
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    $\begingroup$ I think that profitability is a lot more difficult to estimate than costs: the price of jet-A is public, but an airline may offer dozens of different seat prices for one flight. And there's cargo too, which could bring a lot of money or just a little. But in any case, the Economist said that in 2012 airlines worldwide made a profit of $4 per customer carried, so your calculation seems very optimistic (unless BOS-DCA is a very profitable outlier). $\endgroup$ – Pondlife Dec 30 '14 at 21:35