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
It’s called cost averaging. If the majority of the seats are sold at X profit, and a few seats are sold at Y profit, then the airline still averages everything out and still makes a profit.
Taking it a step further, every flight has a fixed cost that the airline is paying regardless of how full the flight is – labor, airport fees, for the most part fuel and maintenance, etc. the more people they have on the plane, the lower the cost per person (to the airline).
Latest Answers