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
Lets do some math here. and use some round numbers. lets assume that it costs $40,000 to fly a plane every time you fly it and there are 200 seats on that plane. so that each seat seat costs $200.00. Now as a company you charge passengers $300 so you earn a profit of $100.00 per customer. Now regardless of how many people are on that plane it still costs you $40,000.00 per flight. so a fully booked flight earns you $20,000, but a half booked flight loses you $10,000
Now let’s take that second flight that is half booked and you offer the remaining tickets at cost ($200) and you get 50 people to pay. Now that flight that you would have lost money on broke even.
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