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
ANY paid fare helps offset the costs of the fuel and maintenance on the plane, the costs to keep the route (yes, airlines pay for the privilege of being able to fly from airport A to airport B), the costs for the flight crew, etc.
Someone offers you $1000 for you to drive them in your car to Orlando. You say sure. Another person offers $500. You say sure. It only costs you $1250 to drive your car. Would you rather leave the 4th seat empty, or take another person at whatever they’ll pay you?
Beyond the obvious answer that it’s profitable, it’s also just good for public financial reporting. More flyers, more revenue, more business all looks good on the next quarterly report. So even if it was a complete break even on the money, they’d still do it.
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).
If the plane takes off half full or all the way full, realistically it costs about the same outside of extra fuel for a heavier plane. Actually fueling the plane, readying it to fly, and staffing the flight and gate is where the costs are.
“The 737-800 burns **850 US gallons (3,200 L) of jet fuel per hour**.”
So figuring you’re like .15% of the added weight, maybe you’re adding like 1.275 gallons per hour but realistically it’s probably far less than that but I’m not an aeronautical engineer. So You’re adding maybe $5/hour of cost or roughly $15 each way on that 3 hour flight. Perhaps add another few bucks for other costs to handle you, they’re still making a profit and that’s assuming you don’t pay for luggage, food, etc.
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.
Where are you finding super cheap tickets? I feel like i haven’t found a flight that’s less than $300 in a while now
The cost of transporting you is about 10 to 20 dollars. Almost all of that is the fees and per passenger taxes.
So if they can fill a seat for 30 dollars then they will. The fuel and wear and tear on the plane from you are practically 0. The vast majority of the costs for flight are fixed.
If you’re travelling 1000 miles, an airliner will use approximately 20% of your body weight in fuel to carry you, which we’ll call 40lbs.
MSP to MCO is roughly 1300 miles, so the airline will need 40×1.3lbs of fuel, which is 52lbs.
Jet A1 is roughly $0.39 per lb at the moment.
52×0.39 is $20.28
So $30 should cover your fuel for the flight, plus a bit extra.
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