I’m considering getting one of those cheap tickets you see which is a direct round trip from MSP to Orlando for $60 including fees (it wasnt the date i wanted but it was cheap). How does that make economic sense for the airline? Sure the plane is making the trip anyway, but how can hauling my 200lbs of man meat 1500miles for $30 each direction not more than offset the fuel?
In: Economics
The sale of optional extras can also be a notable revenue source even if the base fare alone is sold at a loss or close to at cost. If you’re buying an airline ticket, the airline hopes that you will need to pay for at least one bag, or you might want to purchase in flight WiFi, or that you may pay extra for seat selection, or may consider purchasing drinks or snacks during the flight
Delta’s operations from MSP sometimes compete directly against a competitor ultra low cost airline (sun country), hence why a low cost basic economy ticket may make sense for them: they want to fight for that passenger who wants a cheap base ticket in hopes they can generate revenue from them through other parts of the experience
Because they are going anyways. The plane isn’t much more or less efficient based on weight especially when its only a few more people. They either lose 60 dollars or make 30 dollars.
even a medium sized plane like an A320 weights over 60 tons completely empty and almost 80 tons when fully loaded.
adding a few people to the plane will barely change anything regarding fuel consumption but any money you earn is more than you would have otherwise had.
Most of the fuel is used to carry the plane. A 737 weighs 92K pounds dry. The fuel weighs some but the 143 people are probably only another 25K pounds. Max takeoff weight is 172K pounds and your 200 is 0.12%. You’re not nothing, but almost nothing.
Would you rather have $60 or $0??
If the seat is empty they earn nothing. Better to make 20% of your ticket cost than 0%.
If they cancel the plane, there is a lot of costs involved, including refunds, extra tickets and hotel costs with that as well. Often it is cheaper to just fly a half empty plane than to cancel the flight entirely.
There are also all the other expenses they can tack on, baggage fees, drinks, food, etc.
The added weight of more passengers is negligible compared to the plane itself, the fuel its carrying, etc.
No idea what msp is but in europe you can buy loads of flights for $30 so yes it is absolutly possible to fly someone for that amount.
But to realy anwser your question. If they even make $1 more than they spend on fuel (they absolutly are) its saving them money because that dollar goes towards fixed costs like the pay for the pilots as this cost doesnt change if you fly with them or not, its better having you contribute a single dollar to that cost then nothing.
Say €60 is break even (lowest they would sell at), but people are willing to pay:
– some less than 60: they will never fly with you
– some exactly 60: they’ll get this flight
– some more than 60: they may get this flight, BUT: some may choose a more convenient date. They will pay for extra flexibility.
So the airline wants to extract most amount of money, but doesn’t want to miss any sales.
If they price higher than 60, they loose sales. So they sell a few at 60, these people won’t have much flexibility. Then the price goes up for people that want to be able to choose their dates more precisely (eg business people)
Whether the flight is completely full or only has 3 passengers, the airline incurs basically the same cost. It might be *sliiiiiightly* cheaper to fly with fewer passengers because there’d be less fuel consumed, but not enough to actually make it worth it to make the trip.
Selling tickets on the cheap puts more butts in seats. If 30 people buy $50 tickets, that’s $1500 the airline wasn’t getting at full price. Then there’s bag fees and other amenities that people might buy…like wifi service, cocktails, meal, etc. None of that stuff is getting discounted, so even if the airline has to charge less to get you on the plane, they’re still making out with what you spend in flight.
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