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What percentage of a commercial airline's costs are labor costs? Can an airline run a low-cost operation without reducing the wages for crew and pilots, or subjecting them to long shifts? E.g. Southwest has a history of paying good wages; also personnel is unionized there.

Are there other ways that an airline can reduce costs? Simplified fleets, aircraft utilization, good revenue management, come to mind.

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  • $\begingroup$ Welcome to aviation.SE! When you say "incidence", do you mean what percentage of a commercial airline's costs are labor? $\endgroup$ – Pondlife Dec 8 '16 at 18:43
  • $\begingroup$ Yes, in terms of balance sheets. $\endgroup$ – A390 Dec 8 '16 at 19:53
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    $\begingroup$ I edited your question to make it a bit clearer, I hope it's still accurate but you can always reverse or edit again if necessary. Someone may be able to answer clearly about the % of costs that are labor, but the other part about general cost-cutting seems to me very broad and difficult to answer. It also isn't obvious what "good" wages or long" shifts are (pilot working hours are regulated by law in any case), so it could be difficult to come to a definite answer. $\endgroup$ – Pondlife Dec 8 '16 at 20:19
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    $\begingroup$ It's a bit hard to know how to measure this in some ways. If the airline employs, say, the baggage handlers, ramp workers, and cabin cleaners directly, then surely their wages should count as part of labor costs. But if the airline contracts with a ground handling company for these same services, do they not count as labor costs? And what if the airline happens to own the ground handling company, but it's a separate business? $\endgroup$ – Zach Lipton Dec 8 '16 at 21:04
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enter image description here
(Source) Direct Operating Costs

What percentage of a commercial airline's costs are labor costs?

By labor I believe you mean flight- and cabin-crew, the percentage is roughly 12%.

Can an airline run a low-cost operation without reducing the wages for crew and pilots, or subjecting them to long shifts?

Yes, but they won't make money. What Low Cost Carriers do is save in everything by making sure each expenditure runs more efficiently, so they can offer cheap tickets, which in turn enables them to fill all the seats.

Examples for saving:

  • Single-type fleet greatly reduces maintenance cost, which is 15% of an airline's operating costs.
  • Fuel hedging removes the risk of fuel price hikes, but when oil is cheap, it's offset by having to pay more.
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    $\begingroup$ It's worth noting that the graph you show is only direct operating costs. The next slide shows the indirect costs. OP isn't specific but both have certain labor cost components. $\endgroup$ – fooot Dec 8 '16 at 20:56

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