The Middle Seat at the Wall Street Journal has a great article today on what it takes on average for an airline to cover the cost of a flight. The analysis was performed with the help of US Airways and consulting firm Oliver Wyman.  See the full article here. The article reminded me of a CNBC special from about four years ago titled “inside American Airlines a week in the life”.  It was a behind the scenes look at several aspects of AA’s operations including the mathematical breakdown of different fare classes on a flight, the overhauling of an aircraft, and an in-depth analysis of what it takes for AA to narrowly turn a profit on the JFK-LAX 767-200 flights. You can check out the full video here which runs about 90 minutes in length.

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Seth June 9, 2012 - 8:08 am

I have a hard time calling it a “great article,” mostly because the numbers are incredibly misleading.

If you buy the idea that 99/100 passengers are required just to pay the general operating costs then that would mean every airline is losing money every day. None of them have a 99% load factor and they cannot.

Yeah, margins in the industry are thin. That’s fine. But this article is a bad representation of that.


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