How Much Does A Plane Make Per Flight? how much money do airlines make per year? how much money do airlines lose on empty seats? Whether you’re a frequent or occasional flier, there’s a reason why airplane seats feel closer together and why fees seem to pile up at nearly $20 per head.
According to the Wall Street Journal, the average “profit per passenger” of the seven largest U.S. airlines was $17.75 — for just a one-way flight — and the average profit margin across those seven airlines was 9% in 2017. This per-passenger profit is roughly double what airlines around the world make per passenger, according to the International Air Transport Association. This is a shift as the air travel industry has been notorious for volatility and money loss.
How Much Does A Plane Make Per Flight
Ticket prices these days generally cover the expense of the actual flight. The baggage fees, seat selection fees, flight change or cancellation fees, and other charges that rack up during your flight pad the airline’s wallet, according to the WSJ. Baggage fees and reservation penalties are the two most lucrative categories for airlines in terms of net profits.
For the airlines, it’s a delicate balance of covering the cost to move people from point A to point B — with higher fuel prices — keeping fares low enough to stay competitive, making sure seats are full, and turning around a profit. Thus the incentive for packing in more people and adding fees.
The cost of fuel rose 26% compared to the cost in 2016, WSJ reports.
“Fares are too low for oil prices this high,” Doug Parker CEO and Chairman of American Airlines Group explained on a January earnings call. “Over time you’ll see it adjust.”
American spent $1.3 billion more on fuel in 2017 than 2016, and their profit margin (4.5%) was lowest of the big seven airlines.
In fall of 2017, however, Parker boasted, “I don’t think we’re ever going to lose money again.”
Meanwhile, Southwest had the highest profit margin (16.5%) without charging extra for baggage.
how much money do airlines make per year
Or: How I learned to stop worrying and love the fact that I just bought a plane ticket for $600
Flying has got to be a ripoff, right? I mean, when you think of big evil corporations, airlines are definitely up there, especially when you consider things like baggage fees, the way they keep sacrificing leg room to squeeze in more seats and the simple fact that nowadays it costs hundreds of dollars to go just about anywhere. When you look at the news that the industry as a whole raked in $38 billion in profit in 2017, you’ve got to figure that anyone who flies is getting taken advantage of, surely?
And yet, when you look up how much profit airlines actually take in per ticket, it’s usually only about ten to 20 bucks, which sounds… suspiciously low (although given the historical volatility of the industry, this narrow profit does makes sense). So where the hell does all that money from a plane ticket go?
Let’s start with a pretty popular flight: New York to L.A., which, on average, costs about $326. According to a study in the Wall Street Journal, the profit margin on a similarly priced flight was about 20 bucks, so we’ll just use that number. Unsurprisingly, there are also a whole mess of taxes in that airline ticket too, and they total up to about $34.00 according to this enormously informative video by Wendover Productions:
Once you take out the taxes and profit, that leaves us with $272 left of our $326 ticket. Fortunately, the aviation information organization Airlines for America (also known as “A4A”) breaks down the passenger airline cost index (also known as “PACI”) on its site, which is what is costs for an airline to fly you before taxes. According to them, most of this cost is personnel — nearly a third of it. This isn’t just the flight attendants who have to put up with your stupid questions and your kid’s shitty diapers — it also accounts for pilots, maintenance crews, accountants, administrators and everyone else who is required to make that airline function. At 32.5 percent of your PACI, this accounts for about $88 of your ticket price.
Next is fuel, which A4A puts at 20.1 percent of the PACI. This comes out to just under $55 of that $326. Obviously fuel costs can vary from week to week, but according to that same Wendover Productions video, in 2016, airlines paid an average of $1.24 per gallon. They also break down that, while an airbus has a paltry fuel efficiency of just .67 miles per gallon, when you consider the fact that the airbus holds 154 people, the per person fuel efficiency of the airbus is an astounding 104.7 miles per gallon, which is more than double even the most fuel efficient of cars.
how much money do airlines lose on empty seats
While we’re comparing cars to airplanes, Wendover also points out that if you were to drive the distance from NYC to L.A., it would cost you about $340 in fuel, plus another $300 in maintenance and depreciation of your car. On an airplane, depreciation is a whole different ball game: While some planes can last up to 30 years, Wendover explains that the lifespan for a plane isn’t determined by its flying hours, but instead by a “flight cycle,” which basically means one flight, since every time it’s pressurized, microscopic cracks form in the plane. (Don’t worry about that though — flying is still the safest way to travel, statistically speaking.)
So say an $107 million airbus is going to last 25 years, that’s about $4 million per year on one plane alone. This comes out to just seven percent of your PACI, or $19. Given their age and the fact that safety is of the utmost importance, maintenance costs are a part of your ticket too, but surprisingly it’s only about $3.25. So either these things are built really well, or they’re skimping on the repairs (kidding — it’s the former).
Weirdly, more money is spent on those shitty peanuts then on maintenance, as food averages about 1.8 percent ($5) of the passenger cost. Landing fees cost about the same as that at 1.9 percent, and there are also a few other expenses that are on the low end, like office supplies ($1.63), advertising ($1.63), communications for boarding ($2.17), insurance ($0.54) and commissions for third-party sellers ($2.45).
We’re not done yet though — there’s still a third of that PACI left. Terminal space rentals account for $11; professional services like lawyer fees or funded studies by academics are $23 of your ticket; $35 is for what they call “transport-related expenses,” which includes the cost of an airline running a gift shop or serving liquor; and finally there’s another $18.50 for a wide array of “other operating expenses,” such as losses from insurance recoveries and uncollectable debts.
Okay. Now that’s it.
The Five Best Planes To Choose For Your Next Flight
Most people outside the “avgeek” community, and the frequent flyers who are exacting about what they want in a flight (even if they’re not planespotters), don’t pay much attention to aircraft types. That’s a mistake, because the type of aircraft operating your flight can have a huge impact on the overall flight experience – especially if you’re flying economy, where every advantage helps. It’s understandable though, especially when you consider that an A330 on one airline may mean older seats and no mood lighting, whereas on another the same model could have a much more modern and comfortable cabin. Knowing what to look for as you search for flights to book takes quite a depth of knowledge and interest, and most people don’t have time for that.
It is possible, though, to give some general guidelines for planes you should keep an eye out for the next time you’re shopping for flights. These are the top five to aim for if you want a better flight (plus one to avoid):
#1. Airbus A350
The A350 has entered a number of airline’s fleets over the past few years and it is quickly becoming a passenger favorite. This fuel efficient twin-engined, long-haul plane is unbelievably quiet (though it still feels powerful) and boasts a lower cabin altitude, higher humidity, taller ceilings and bigger windows. It’s a good bet it will also have all the modern airplane perks like mood lighting and the latest entertainment systems and WiFi. Oh and then there’s the stunning tail camera. Seats in economy are usually laid out in a 3-3-3 configuration – the same as most Boeing 787s – but the A350 cabin is wider, so everyone gets more room to stretch out.
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#2. Airbus A220
The A220’s benefits are covered here at length, but to rehash briefly: it’s a fantastically roomy plane considering it’s relatively small (seat count just over 100), it’s quiet, and it has all the newest tech like nice lighting and more.
Some airlines that have it: Delta, airBaltic, Swiss, Korean Air, Air Tanzania. Coming soon: Air Canada, Air France, and more.
#3. Boeing 767
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This might be a surprise because the 767 is an older plane. But it’s still a transatlantic workhorse (turns out it ranks number three across the pond), and there’s one simple reason to choose it: a 2-3-2 configuration in economy. That means only one middle seat for every row, and for those traveling in pairs it’s a nice option for sitting together and having a window without a stranger sharing your set of seats. And although it’s an older aircraft at this point, most of the 767s still flying have the nice 777-style overhead bins and reasonably comfortable interiors anyway. If it’s between a 767 and a 787 (with its narrow 3-3-3 configuration; see below for more on that), I’ll pick a 767 every time.
Some airlines that have it: United, Delta, American, LATAM, Austrian Airlines, All Nippon Airways, Japan Airlines. Coming soon: None, but there are rumors that Boeing may launch a new-engined variant and extend its life further. We’ll see what happens.
#4. Airbus A380
The A380 may soon be a thing of the past after Airbus announced this year that due to slow sales it would be halting production in the next couple of years. But the double-decker behemoth remains a fantastic airplane to fly on, even if it’s a little too big for most airlines to make money with. It’s quiet and smooth, handles turbulence better than just about anything out there, and evokes a romantic, cruise-ship-in-the-sky feeling. Downsides: it has relatively small windows, its lower deck is almost overly cavernous, and boarding and deplaning alongside so many people at once can be a slow process. But still, it’s a very comfortable airplane.
Some airlines that have it: British Airways, Lufthansa, Air France, All Nippon Airways, Etihad, Emirates, Qatar Airways, Singapore Airlines, Thai Airways, Qantas. Coming soon: Unfortunately there are unlikely to be any new airlines operating the type, and some of the above airlines may soon start to phase them out.
#5. Airbus A320neo
The A320neo looks about the same as older A320 family planes, but you can tell it apart by its much bigger engines and distinctive winglets. As an older aircraft with some design improvements, it doesn’t change the game for passengers like the A350 does, but you’re much more likely to come across an A320-sized plane, and if you do, see if you have the option of a neo (look out for code 32N or A20N). The big plus is a much quieter flight, plus likely a more modern cabin with nice lighting. It’s also fuel efficient and puts out less emissions. Downsides: it’s still a 3-3 configured plane in economy, which means that those who like a window seat have to be sandwiched in by up to two strangers.
Some airlines that have it: Delta, American, Frontier, Spirit, Interjet, SAS, British Airways, Lufthansa, TAP, Turkish Airlines. Coming soon: With over 6,000 on order, there are many on the way across the world.
And for one to avoid? This may come as a surprise:
Boeing 787 Dreamliner
It’s a good new plane in a number of ways, with many of the benefits of the A350 including bigger windows and a more comfortable pressurization and humidity. But it has two distinct problems. The first is relatively minor, but annoying: it has high-tech dimming windows (instead of physical window shades) that can be controlled by the cabin crew, meaning if they don’t want you to look out the window, you won’t get to. The second one is the dealbreaker: nearly all airlines use a 3-3-3 configuration in economy, and the cabin is really a little too narrow for that, meaning a full flight in the back of the plane is borderline torture with narrow seats and no shoulder and elbow room.
It is an interesting time for not only space travel, but private aviation, too. While larger and larger jets are flying farther and faster, smaller personal jets and enthusiast aircraft are thriving as well. And let’s not forget the vertical takeoff and landing craft that shifted into hyperdevelopment mode. There’s never been a more exciting time to be airborne.https://3bd377ec286ee5eaccdebbfc04e8ff1a.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
BUSINESS JET OF THE YEAR:
Bombardier Global 7500
Bombardier Global 7500. Courtesy of Bombardier
After much anticipation, the first Bombardier Global 7500 business jet entered service in December of 2018—and to positive fanfare. Since coming on the scene, the 7500 has wasted no time in breaking as many records as possible. At press time, these include distance (between Singapore and Tucson, Ariz.) and speed (between New York and Los Angeles). While performance for a private jet got an upgrade, so did comfort—the Bombardier Nuage chair with its free-floating base is the first true seat revamp in 30 years for the private aviation sector. The 7500 accommodates 19 passengers, has a range of 7,700 nautical miles (8,861 regular miles—say, from LA’s Van Nuys Airport to Dubai or San Francisco to Singapore, among many other pairs) and has a top speed of Mach 0.925. Even the crew gets a posh boost with a private seat that fully reclines for sleeping and is separated by a privacy door. The flexible cabin plan could include, for example, a master suite with queen bed with storage and an en-suite bathroom with shower; a media room with sofa that can become a bed (more stash space underneath); a dining and living/conference area (with a table that folds out for six); the crew rest suite across from the galley (with all the secret hideaway drawers and popup stow slots as well as an oven and sink for fresh preparations); and another forward bathroom. This jet really has everything you might need for that ultralong-range flight.
Controlling sound, movies, blinds and lights—from any seat or bed— just got easier with a state-of-the-art pop-up dial with an OLED display. This dial, named the “nice Touch cabin management system,” is part of a platform developed in collaboration with Lufthansa Technik. And it’s pretty cool—as is the Ka-band satellite communications for fast internet speeds. There’s no doubt that the world’s largest and longest-range business jet lives up to the hype.https://3bd377ec286ee5eaccdebbfc04e8ff1a.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
Bell Nexus Courtesy of Bell
If anyone is going to truly take a vertical takeoff and landing (VOTL) concept to market, our bets are on chopper experts Bell. With seven decades of experience as a helicopter manufacturer, and as the builder of the V-22 Osprey and the V-280 Valor tiltrotor military aircraft, Bell carries cachet among the new and established companies developing vertical takeoff and landing aircraft that also fly horizontally like an airplane. So while you can dismiss some of the recent VTOL concepts as pies in the sky, you can’t do that here. The Bell name lends credibility to the four-passenger hybrid-electric VTOL, which features six 8-foot-diameter ducted fans that tilt to make the instant transition from vertical takeoff to horizontal flight. Plans call for the Nexus to initially be flown by a pilot, but eventually it could fly autonomously. The craft will have a range of about 150 miles and a top speed of roughly 150 mph. It will be small enough to take off from and land on most helipads. Bell hopes to begin flight tests with a prototype in 2023 and have the Nexus in service by the mid-2020s.
Bombardier Challenger 350
Bombardier Challenger 350 Courtesy of Bombardier
For those who need their private jet to be able to cross the country (or the Atlantic) on the regular, the Bombardier Challenger 350 has been the business jet of choice, averaging more than 60 deliveries annually in its first four full years of service (2015 through 2018), many going to NetJets, Flexjet and other private-aviation companies that appreciate the reliable, workhorse nature of the Challenger 350 and see its $27 million price as a solid investment. You just couldn’t fly into airports such as Aspen or London City because of steep approaches or shorter runways. But the aircraft’s capabilities and cabin comforts seemed to outweigh that negative. It has a range of nearly 3,700 miles, a max cruising speed of 548 mph, and room for 10 passengers. The cabin is just over 25 feet long, 6 feet tall and 7 feet 2 inches wide. The standard configuration seats eight passengers in two sets of four comfy club seats. Last year, however, Bombardier enhanced the Challenger 350 so that it could receive steep-approach certification. Now it can land at (and take off from) airports that used to be off limits. The latest version of the aircraft needs less than 2,400 feet of runway to land. https://3bd377ec286ee5eaccdebbfc04e8ff1a.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
Cessna Citation Latitude
Cessna Citation Latitude Courtesy of Cessna
The Cessna Citation Latitude was the third most-delivered business jet in 2018, behind the Cirrus Vision Jet and Bombardier’s Challenger 350. In its own midsize class, however, the Latitude was out in front, with 57 handed over last year, up from 54 in 2017. While three more wouldn’t seem like much in other sectors, when you’re talking about a $17 million piece of kit, each and every one is significant. Desire for the Latitude is growing.
Perhaps it’s because its flat-floor cabin has six feet of headroom. Or maybe it’s that 22-foot cabin’s ability to seat nine passengers. The pressurization system gives the feel of flying at 5,950 feet when the jet is actually cruising along at 45,000 feet. With four passengers, the Latitude can fly more than 3,100 miles without stopping at its 513 mph max cruising speed. Garmin’s G5000 touch-screen avionics with synthetic-vision technology give top-notch guidance in the cockpit.
Airbus ACH135 Helionix
Airbus ACH135 Helionix Courtesy of Airbus Corporate Helicopters
Quick urban hops and jaunts to remote areas that don’t necessarily have an airstrip got a lot more luxe—and safe—last year. ACH, the Airbus corporate helicopters division launched in 2017 that’s dedicated to corporate and personal choppers, delivered the first ACH135 Helionix in September. The initial example features a five-seat configuration (plus pilot) with ACH’s sports car–inspired Line series interior. Most noteworthy is the bird’s avionics system, which was designed to improve situational awareness and to reduce the complexity of the system and number of displays pilots have to keep track of. It also has a more advanced autopilot system to make flying simpler and safer, including an auto hover “pause” button (ideal when faced with low visibility or busy environments), a “go-around” button (the ACH135 will automatically fly around and reposition itself on the best landing approach) and automated engine management (ensuring a smooth and safe flight even if one of the two engines fails). Two turboshaft engines power the agile aircraft to a maximum cruise speed of 137 knots and a top endurance of 3 hours and 39 minutes. The cabin offers up large windows for great visibility, as well as its corporate jet–style finishing, such as hand-sewn soft leather seats. https://3bd377ec286ee5eaccdebbfc04e8ff1a.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
Embraer Phenom 300E
Embraer Phenom 300E Erich Shibata Nishiyama
The most-delivered light jet for each of the past seven years became even better in 2018, when Embraer began producing the Phenom 300E, giving the popular plane a tech and comfort makeover. Embraer redesigned the interior and installed, among other features, a new cabin-management and inflight-entertainment system by Lufthansa Technik. The system is housed in a panel that runs along the centerline of the aircraft’s ceiling and includes two 7-inch swing-down displays. Reading lights and fans have been moved into the panel to create more headroom above the seats. The panel also includes new ambient lighting. The redesign creates more space, specifically more aisle room (in addition to the extra headroom), while adding larger seats, which now have broader backs and extendable head and leg rests. The 300E, which is usually configured to seat six passengers behind the cockpit (but can seat up to nine plus pilot), has the same range and high cruising speed as its predecessor: 2,270 miles and 521 mph. (Base price: $9.45 million.)
Winch Design Courtesy of Winch Design
Founded in 1986 by Andrew and Jane Winch as a yacht-design company—both exterior and interior—London-based Winch Design has made a name for itself by creating bespoke aviation, yachting and land-based masterpieces, inside and out. This year, we applaud the studio for its custom-interiors concepts for Boeing Business Jets and Airbus Neo aircraft.
By employing irregularly shaped spaces within the cabin, with molded paneling and movable (but securable) furniture, the Winch team creates compelling, adaptable and livable spaces that inspire relaxation in flight but are at the ready to do business when the time is right.
Soft leathers, light-colored marble, natural shells, cream-silk carpets, rosewood accents and mother-of-pearl accessories—not to mention artwork—set a residential tone for the serene aircraft interior. Full-size bathrooms give the feel of home. Dare we bring the kids?https://3bd377ec286ee5eaccdebbfc04e8ff1a.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
VSS Unity MarsScientific.com/Trumbull Studios
“It was intense and magical and serene and almost unlike anything anyone can imagine.” That’s how Beth Moses, Virgin Galactic’s chief astronaut instructor, described her trip as a passenger aboard VSS Unity, Virgin Galactic’s rocket-fueled space plane that, in late February, traveled beyond the Earth’s atmosphere and into space for the second time—and for the first time with a passenger. If all goes as planned, anyone who can afford a $250,000 ticket won’t have to imagine what Moses described; he or she will be able to experience it. So far, more than 600 people have reportedly purchased tickets to fly aboard a Virgin Galactic space plane. It’s doubtful any civilians will make the trip by July 18, the 50th anniversary of the launch of Apollo 11 and the date by which Virgin Galactic founder Richard Branson has said he hopes to make his first space flight. However, the February flight was certainly more than just a small step for the company, which Branson established 15 years ago; it was a giant leap for space tourism. After flying VSS Unity 51.4 miles above sea level (NASA places the border between the Earth’s atmosphere and space at 50 miles above sea level) and landing it safely in the Mojave Desert in December, Virgin Galactic’s two pilots were joined by Moses for the February flight, which reached an altitude of 55.87 miles and a speed of Mach 3.0. Moses was on board to evaluate the space-flight passenger experience: the intense, magical and peaceful sensation of weightlessness and the sights of the curve of the Earth and the star-filled sky.