The true cost of flying revealed

By Qin Xie for MailOnline

It turns out airlines don't really make that much money. Photo / Getty Images
It turns out airlines don't really make that much money. Photo / Getty Images

Sir Richard Branson once said, "if you want to be a millionaire, start with a billion dollars and launch a new airline.'

He's far from the first business-savy person to have that experience though - Donald Trump lost more than US$100 million ($147 million) of his personal wealth on the failed Trump Shuttle venture.

Now, a new video has broken down what it calls the true cost of a flight using the journey from John F Kennedy Airport in New York to Washington Dulles Airport in Virginia - and it shows just how small the profit margins can be for airlines. It turns out they barely make US$10 ($14.73) on an US$80 ($117.84) fare.

The estimates were calculated by Wendover Productions using numbers provided by official sources such as the Transportation Security Administration (TSA), Airbus and Delta.

According to the calculations, each passenger on board an Airbus A320, which has a capacity of 154, costs the airline US$68.50 ($100.90) for the 260-mile journey.

MailOnline Travel has checked the prices for the journey using Skyscanner while in New York and the fare comes to an average of around US$80.

This means that on average, an airline makes just US$11.50 ($16.94) on a one-way journey.

Of course, this profit goes up the closer you get to the departure date.

The US$68.50 cost to the airline factored almost every aspect of the journey, from obvious ones like fuel and crew salary to less frequently discussed costs like maintenance and insurance.

The video begins by arguing that the cost of fuel actually made up for very little of the total cost of an air fare, despite the fact that so much fuel is used.

A typical journey from New York to Washington DC on the Airbus A320 will use up 317 gallons of fuel.

In comparison, a Toyota Camry can use the same amount of fuel to drive from New York to Los Angeles 49 times.

Domestic passenger ticket tax is charged at 7.5 per cent of the fare. Depending on the size and location of the airport, an additional 7.5 per cent can be applied on top of this, though it doesn't apply to the New York to Washington DC route.

Then there's a US$4 ($5.89) flat rate for any flights within the USA - more if travelling to Hawaii or Alaska.

Both of these taxes are paid to the Federal Aviation Administration (FAA).

Many people outside of the USA will probably be unaware that since the terror attacks on the twin towers in 2001, the TSA has levied a 9/11 security fee, currently US$5.60 ($8.25), on top of fares to cover the extra security costs that have been implemented.

If it was an international flight, even more taxes would be levied on top of this.
In this example, the taxes add up to US$15.60 ($22.98).

Of course, before you even get the plane on the tarmac, the airline has had to pay for the plane and this cost is also factored into the airfare here.

Using average numbers for the cost of the A320 and the number of journeys the plane is typically able to make before it's scrapped, the cost per person is an estimated US$11.50.

But this figure will vary case-by-case.

Dr Downer commented to MailOnline Travel: "The number they cite for maximum number of "cycles" [journeys] seems a bit low (I think the lives of many airframes are extended once they reach the "max")."

And then there's the maintenance fees contributing to the cost of every flight.
A plane might needs parts replaced, inspections, component overhauls and engine restorations.

There are parts and staff costs associated with this, which the video equates to approximately US$14 ($20.62) per person.

Even with a ship-shape aircraft, you will still need insurance - estimated to be US$0.25 (37c) for the one-hour journey based on the total cost of insuring the plane for a year.
A surprisingly small proportion of the fare is the non-flying cost.

This, according to the video's producers, includes administrative staff, marketing, office rents and other miscellaneous costs.

As this is very hard to estimate and will vary substantially between different airlines, a conservative estimate of US$10 has been given.

These assorted fees have added up to a total of US$68.50, but as the video points out at the beginning, all of these numbers are just estimates and there are ways that airlines can reduce their costs further.

There could also be en-route charges for things like navigation and air traffic control.
But given that the numbers are based on a completely full flight, it goes without saying that a partially filled flight could easily mean losses for the airline.

- Daily Mail

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2016, NZME. Publishing Limited

Assembled by: (static) on production bpcf02 at 05 Dec 2016 06:15:01 Processing Time: 1001ms