Showing posts from June, 2012

Airlines stand to lose heavily should the euro collapse

MEETINGS of airline bosses are rarely cheerful events, profits being tighter than leg room in economy. But this year’s annual gathering of the International Air Transport Association (IATA) should have been different. For a start, the airlines’ umbrella group picked the most promising market to host the pow-wow, which was held in Beijing. Not only is air travel booming within and from China, but the country’s airlines also made half of all global profits last year. But as IATA delegates assembled for their gala dinner on June 11th at the Great Hall of the People in Tiananmen Square, there was a ghost at the feast. The topic on most people’s minds was not the dozens of airports to be opened this decade in China, nor the quarter of a trillion dollars the host country is spending to become an aviation and aerospace superpower. On the contrary, all eyes were focused on the spectre of financial chaos in Europe. The euro zone’s troubles have already pushed many European carriers int

Airlines' Profit Amounts to Revenue from 1 in 100 Passengers

Executive Summary If a U.S. airline collected $16,400 in fares and fees for a typical (hypothetical) domestic flight, just $164 of that would become profit, according to an analysis by US Airways and Oliver Wyman for the Wall Street Journal. In other words, if there were 100 passengers, the total profit would be represented by just one traveler's fare and fees. Fuel costs would eat up the revenue from 29 passengers; salaries, 20 ; ownership costs, 16 ; government fees and taxes, 14 ; maintenance, 11 ; and "other" costs, 9 . Article On an airplane carrying 100 passengers, how many customers does it take, on average, to cover the cost of the flight? The Middle Seat asked US Airways and consulting firm Oliver Wyman to crunch airline expenses down to the percentages that an individual passenger pays, taking a hard look at costs of running an airline. US Airways created a hypothetical flight of 100 passengers. Each one paid the average $146 fare for a domestic fli

Openskies opens economic class... Again!

Some airlines giveth, some airlines taketh away. Depending on how you prefer to travel, this could be a matter of both. British Airways' all-premium cousin, OpenSkies has announced the addition of a third class onto their 757s flying over the Atlantic. Besides the Biz Beds and Biz Seats, passengers can now expect an all new, Eco Class. Looking back at the history of this BA subsidiary, this 3-class concept is not new at all. When first launched, OpenSkies originally had a small economy cabin that offered customers a more upscale flying experience. After the merger with L'Avion in 2008, aircraft were reconfigured to an all-business class model featuring both lie-flat and recliner business class seats. Currently some aircraft are still flying with either 12 or 24 lie-flat seats and between 40 and 72 business class seats. Beginning June 19th, the entire OpenSkies fleet will squeeze more seats into their birds. From the front of the plane, the airline offers 20 lie-flat be