McKinsey & Co article on the economics of an airline flight.

[kelvedon]

A brief article on how much an airline can make on a flight.

https://www.mckinsey.com/industries/travel/our-insights/the-economics-of-an-airline-flight

 

[Melburnian1]

Interesting, but I've been on quite a few international flights in recent years when all or almost all seats are occupied, despite my historic view that normally five per cent of passengers will be no-shows for a multitude of reasons.

The lowest number of passengers I've ever had was 130 on an Airbus A333 (international flight), and 11 on an Ansett plane (probably a 737 IIRC) from Melbourne to Canberra. These were outliers.

Given what's occurring with the Iran war, fuel prices (despite QFi hedging 80 per cent of its requirements) may have been underestimated in the article.

 

[Saab34]

I think the cost benefits around outsourcing everything is slowing diminishing. Airlines globally are facing cost pressures from all corners, we are seeing many put the investment back into in house engineering, and also with new labour laws rolling in across many nations, the cost advantage of outsourcing some staff has actually become uncompetitive compared to in house.

The trick moving forward seems to be attempting to reduce the exposure to a wide range of parties. Those who outsource the whole model outside of pilots and head office staff will be in for some pain. You only need to refer to the Bonza creditors report to understand the crippling nature that costs can have when you don’t have total control over it.

Airport costs locally are going to be the focus in the coming years with billions of investments starting to flow over to increased charges.