Thinking about "low cost" airlines that often tickets of about 40 Euros for 2 flight hours, I was wondering how these companies can cover their costs.

Considering for example EasyJet that fly with Airbus A319 (150 seats), with a unique cost of about 90 million dollars, on a typical 2 hours flight (common average European route) every flight could gain about 6000 Euros in tickets.

I can't understand where is the "gain" considering fuel, crew costs, maintenance etc...

Can you give some references?

  • 2
    $\begingroup$ The "gain" is usually in the extra's. Pay for luggage, pay for carry on's, pay for snacks, pay for drinks, pay for premium seats, pay for priority boarding, etc. They also don't usually buy brand new aircraft, they pay their workers poorly, and some have "interesting" maintenance practices. $\endgroup$ – Ron Beyer Feb 6 '17 at 14:46
  • $\begingroup$ Well... I generally see only some drink or snack... how much gain? 500 Euros???? It seems already too much.... And... EasyJet buy its aircrafts, there are dozens of its orders placed in Airbus $\endgroup$ – Luca Detomi Feb 6 '17 at 14:49
  • 3
    $\begingroup$ Don't forget that not every passenger onboard has paid the same price. Thanks to yield management, the price you pay will vary greatly depending on various factors. Some passengers might pay a lot more, thus increasing airline revenue. $\endgroup$ – kebs Feb 6 '17 at 15:41
  • 1
    $\begingroup$ Even if their profit margin was 1000 euros per flight. They might fly that route 5 times a day, near-on 7 days a week multiplied by 100 routes.... thats not bad. But I betcha their profit is a lot more than 1000/flight. The economics must add up, otherwise we wouldnt have low-cost carriers. $\endgroup$ – Jamiec Feb 6 '17 at 15:42
  • 1
    $\begingroup$ In addition to all of the fees that others have mentioned, keep in mind that the average ticket probably isn't selling for 40 EUR. Probably closer to ten times that figure when last-minute tickets are factored in. Also, the airlines are not paying sticker price for the planes. Larger airlines (like easyJet) are typically getting very large discounts by ordering many planes. $\endgroup$ – reirab Feb 6 '17 at 16:10

For the low-cost model there's an article called The true cost of flying revealed, which uses a 154-passenger A320 for its figures.

According to the calculations, each passenger on board an Airbus A320, which has a capacity of 154, costs the airline $68.50 (£47.06) for the 260-mile journey.

The one-hour flight costs the airline an estimated $2.50 per passenger [for fuel].

The total cost equals \$10,549 per hour "with profits as low as \$10 [per passenger] on some flights".

Also from the article—

If you want to be a millionaire, start with a billion dollars and launch a new airline.— Sir Richard Branson

  • 1
    $\begingroup$ Fun fact: my last trip from Frankfurt to Berlin and back (~270 nm each) was ~130€ with Lufthansa. The invoice showed 26€ as the actual fare and 104€ for "Taxes, Fees and Airline Charges" of which the airline charge was 48€, so I guess they got 26+48=74€. That would mirror your example. $\endgroup$ – PerlDuck Feb 6 '17 at 19:55
  • $\begingroup$ Personally I flew from Milan to Oslo and back for 90 € (RyanAir) and the same price from Milan to Amsterdam and back (EasyJet) $\endgroup$ – Luca Detomi Feb 7 '17 at 7:42

This article presents the full breakdown of the operating costs of an A320.

TL;DR: about 15kUSD/hour, including market-based depreciation. The scenario is based on a private-jet scenario, with much fewer hours per year than your typical EasyJet aircraft, so this number should be considered as the upper limit of the actual operating costs of a low-cost airline.

  • 2
    $\begingroup$ Please note (or keep in mind) that private planes are subject to far more relaxed inspection and overhaul regulations than commercial aircraft are and that drastically changes the cost to operate. $\endgroup$ – Dave Feb 6 '17 at 18:47

There are a lot of factors that account for this. This answer covers the bulk purchase aspect of the deal. Basically EasyJet and the like see cost benefits by only flying a singly type of plane and thus only need mechanics and pilots trained on that air-frame and spare parts are interchangeable etc.

They also see discounts, as mentioned in the comments by not offering things like meals, free luggage etc.

Since they make short haul hops between nations often they may be able to work out deals for hauling cargo as well as people to undercut the cost of your ticket.

I cant find the article but it has been noted that in many cases by buying 100 planes at a time significantly reduces the cost of each air frame. They then in turn sell them in a shorter period of time and don't fly them to the end of their life. In many cases an air frame thats only a few years old will hold good value considering the sever discount it was original purchased at.

You can find some info on the cost of operation for a long haul flight here. Things like fuel consumption rates etc and the like will carry over to short haul flights.

  • $\begingroup$ Ok, thanks all for your answers but I think that is missing the most important information: how much for one flight hour on this kind of jets? What are costs? Please, do you have this kind of info? I think that is necessary for further considerations about prices, gains, etc $\endgroup$ – Luca Detomi Feb 6 '17 at 16:02
  • 2
    $\begingroup$ This covers the answer for long haul flights which will share some of the same costs. Most of that info is not public and it can be hard to determine objectively $\endgroup$ – Dave Feb 6 '17 at 16:04

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.