Theres like 5 companies in the US that handle ALL the flights. How do they still have thin profit margins despite being the only options?
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In: 72
The answer is gas and demand are really hard to guess. Your expenses to buy, staff and maintain an airplane are relatively fixed. The tough part is how to guess what to sell a ticket for 6 months to a year from now when fuel prices can double in that amount of time. Demand is another tricky one to forecast, you want a gate in New York LaGuardia, you need to send 10 flights a day out to keep it all year. Flights on Tuesday might not be full and lose money but Friday should be full and hopefully makes up for it, either way you pay the same amount for the landing slot and gate. Easy math: plane has 100 seats, your best guess expenses need it to be 75% full to break even selling one or two extra seats above that is all the profit you get, that has to happen 4000 times a day 365 with no hiccups for you to make a profit. Cancellation for weather or maintenance, you lose that flight and all extra revenue for the rebooking. Airlines are a tough business
-20 year airline pilot
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