10
$\begingroup$

Often, airlines are unable to sell all the seats of a flight and some seats go unsold. So, with what occupancy ratio is it usually profitable for an airline to operate?

For example, Recently, a Turkish Airlines A330, flying from Bangkok to Istanbul (12,000 KM) made an emergency landing after a bomb hoax. The interesting thing was that it was carrying only 142 passengers, against its marked capacity of 250 passengers (occupancy ratio of about 0.6).

And what are the factors which would influence this choice – like probably, it would be cheaper to operate a B787 with 0.6 occupancy ratio compared to a B747. What are some other factors which influence this?

Improve this question
$\endgroup$
13
  • 3
    $\begingroup$ Scheduled flights have to be operated regardless of occupancy. Only technical reasons allow airlines to cancel a flight. $\endgroup$
    – Peter Kämpf
    Jul 8, 2015 at 8:13
  • 4
    $\begingroup$ Anecdotally, I was once waiting to board for my last leg home. There were maybe 20 people waiting at the gate when they announced a delay. They continued to announce 30 minute delays until the next flight to the same destination at which time there were maybe 50 people waiting at the gate. The 2nd flight was also delayed for a couple of hours until the last flight of the day which we all boarded and took a nearly full plane. Maybe it was coincidence, but it looked like they cancelled 2 lightly booked flights to make 1 full one... $\endgroup$
    – FreeMan
    Jul 8, 2015 at 12:16
  • 4
    $\begingroup$ Then there's this guy who went viral 6 months ago, because he was literally the only person on the plane: fox13now.com/2015/01/13/… $\endgroup$
    – Danny Beckett
    Jul 8, 2015 at 15:06
  • 3
    $\begingroup$ @PeterKämpf - Source? It may be technically illegal, but if they can find any excuse not to fly an underloaded plane, they will. I have a source in the family who works with Southwest's flight scheduling software (aka the "cancellator") and he says that when a plane is pulled for maintenance, the system will juggle the remaining flights and planes to inconvenience the fewest number of passengers possible; that means the least booked flights get cancelled and those passengers rebooked to create fuller flights. He wouldn't go so far as to say how "convenient" these maintenance pulls might be... $\endgroup$
    – KeithS
    Jul 9, 2015 at 19:17
  • 2
    $\begingroup$ @KeithS: Absolutely, this happens routinely. But not officially. I've witnessed it myself when booked on the one before last connection of the day. My flight was cancelled "for safety reasons" or "for repairs", and I flew two hours later in an half-empty plane. They never ever will admit that the flight was pulled to save some money - this would alert the regulating authority. $\endgroup$
    – Peter Kämpf
    Jul 9, 2015 at 19:50

2 Answers 2

Reset to default
12
$\begingroup$

They can operate with 0 passengers, but will most likely not generate any revenue (unless cargo is carried to generate additional revenue). Revenue and profit on a passenger flight (assuming no paid cargo) will be based upon how many tickets were sold at which price, so the number of passengers required for any given flight to break even will be variable and cannot be answered in a general way.

Improve this answer
$\endgroup$
3
  • 1
    $\begingroup$ Note that they could still run a profit by selling seats to travel agencies. If they can't fill pre-purchased seats (for instance when terror alerts suddenly lead to mass cancellations) the airline is still paid and it's the agency that takes a loss. $\endgroup$
    – Lilienthal
    Jul 8, 2015 at 12:33
  • $\begingroup$ I have reworded the question... $\endgroup$
    – anshabhi
    Jul 8, 2015 at 12:40
  • 3
    $\begingroup$ @anshabhi As SentryRaven said, it will vary and will not be answerable in a general way. For example, there are several routes in the U.S. that are usually flown almost empty, but with high per-seat fares and/or government subsidies in order to provide air carrier service to remote areas. On the other hand, routes with lots of competition will usually need high occupancy ratios to be profitable. $\endgroup$
    – reirab
    Jul 8, 2015 at 13:43
4
$\begingroup$

Generally, it is a load factor of roughly 70%, but the answer depends on many factors. Also, many airlines operate a fleet of different types of aircraft so the answer is never easy.

100% load factor @ 100 seats × \$100/seat = \$10,000.

\$10,000 − operating costs (fixed and variable) = profit per flight.

One you add in aircraft type, ancillary revenues, and total amount of flights, and the routes/network, the answer gets very complicated.

Improve this answer
$\endgroup$
2
  • 3
    $\begingroup$ Can you provide a citation to the 70% claim? $\endgroup$
    – kevin
    Jul 10, 2015 at 2:35
  • $\begingroup$ With fares per seat on the exact same plane known to vary by a factor of 20+, that methodology is doomed to failure. A flight could be profitable with the right ten passengers or unprofitable with the wrong one hundred passengers. $\endgroup$
    – StephenS
    Jan 7, 2019 at 0:51

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .