Flight Beat: Tidbits About U.S. Airlines
 

A Travel Weekly Magazine Special Report on Airlines contains some interesting stuff:

U.S. Airline Costs:
Fuel 24.7% (% should go up this year)
Labor 24.2% (doomed to go down i believe)
Other 22.2% (non payroll taxes, flight crew meals, hotels, lodging, outside equipment for aircraft repairs, interrupted trip expenses, corp and fiscal expenses such as directors' fees and SEC fees, immigration service charges)
Aircraft Ownership (7.6%)
Professional services 6.9%
Nonaircraft Ownership 5.2%
Landing fees 1.9%
Food and beverage 1.5%
Maintenance material 1.3%
Commissions (1.2%)
Communication 1%
Advertising and Promos 0.9%
Nonaircraft Insurance 0.6%
Utilities/office supplies 0.6%
Aircraft Insurance 0.1%
Source: International Air Transport Association

Price per gallon of airline fuel, average for 2005 - $1.66 a gallon

up from $1.16 in 2004
.85 (U.S. cents) in 2003
.71 in 2002
.78 in 2001
.81 in 2000
.53 in 1999
.51 in 1998
.65 in 1997
.66 in 1996
(source: ATA)

TOP 20 AIRLINES BY OPERATING PROFIT
(regional airlines excluded)
($=billion)
British Airways $1.3 Billion
Air France-KLM $1.2
Lufthansa $.877
Southwest $.820
Emirates $.786
All Nippon Airways $.776
Quantas (yr 2004) $.775
Singapore $.590
Cathay Pacific $.533
Ryanair $.459
Air China $.458
Iberia $.457
Air Canada $.458
Thai $.269
Gol $.266
TAM $.232
Korean $.207
Virgin Blue $.184
China Eastern (2004) $.179
LAN $.142

Q- what impact will the London Heathrow allegedly aborted terrorist attack have on BA's 2006 profits?
Ironically the terrorists attacks on London Tube and buses seems to have little effect on BA's profitability.

Think of the money BA saved by the non-filing of all those wrongful death lawsuits as a result of aborting those terrorist attacks.

REVENUE PASSENGER MILE
"One-fare-paying passenger flown one mile (or km). RPMs (or RPK), not number of passengers, are themost common way the airline industry measures traffic."

The International Air Transport Association reports that almost 100% of planes that take off land safely and that 100% of planes that land safely took off successfully.

WORLD'S LARGEST AIRLINES
(as measured by revenue passenger kilometres) (RPKs - 2005)


American 222.4 billion $
Air France-KLM 184.6
United 183.3
Delta 166.7
Lufthansa Group 133.3
(includes Swiss)
Northwest 122
British Airways 111
Continental 109.3
US Airways 103.6
(includes American West)
Southwest 96.9
Japan Airlines 94.4
Singapore Airlines 81
Qantas 74.4
Air Canada 71
Cathay Pacific 65.1
China Southern 60.4
Emirates 59.3
All Nippon Airways 56.4
Air China 52.1
thai 49.9
(Source IATA)

Interesting that the most profitable airlines offer a free glass of wine in coach and the U.S. airlines charge $5 for a beer or wine on international flights.

and interesting that only one in the top 20 of profitable airlines is American...and that one is Southwest.

yes - several U.S. airlines in the top of the RPK list but only one in the real profit list - guess American carriers have far more expenses than leaner foreign carriers? One would have thought European carriers would have been saddled with higher employee costs.

Maybe an airline should merge with an oil company - it could be very competitive if it could get its oil at cost. On the other hand, the cynic in me thinks such an airline would probably charge the same rates as any other airline anyway, just because they could.

PalQ - Thanks for posting this info - very interesting.

Few US airlines are making profits. That means US travelers are getting good deals. We should be very happy about that.

About successful profits the Travel Weekly Special Report "Airlines" says:

"Lufthansa's focus on premium travelers as its path to prosperity led to decisions such as its creation of a private jet service in Europe and its construction of a special terminal at Frankfurt Airport for its 1st-class customers and highest-level frequent travelers that include a personal assistant and individual office."

"Airlines that try to be all things to all people and serve every possible market end up with very mixed fleets of aircraft and pilots, complex maintenance arrangements and large, overstaffed head and regional offices...inevitably their costs are pushed up"

"many are also trying to increase revenue in other ways, including encouraging customers to buy upgrades at the gate. Northwest for example offers some perferred seats in coach to last-minute customers willing to pay an extra $15"

"Increasingly airlines are trying to augment revenue from sources other than ticket sales. That includes sellingmeals and headsets in-flight and selling travel packages. american has turned its maintenance department into a revenue producer by offering its services to other airlines. Many non-U.S. airlines, such as koreean, Lan Chile, Cathay Pacific, Singapore and Lufthansa make significant revenure carring freight.
Other new and future sources of revenue include renting out portable entertainment devices for in-flight use and charging for in-flight Internet access. Cell phone usage charges may be in the offing if government allows in-flight usage. A couple of low-cost carriers in Europe have begun charging for checked baggage.
No one has made more of the opportunity to collect ancillary revenue than RYANAIR, Europe's big low-fare, no-frills carrier. It counts on money-makers such as a cut of hotel bookings, car rentals and travel insurance sales.
Ryanair CEO Michael O'Leary foresses a future in which his airline lets customers fly free, especially if he can offer in-flight gambling."

IN-FLIGHT GAMBLING: I guess the stakes are high for airlines - i'm pretty much a laissez-faire type in regards to allowing gambling but on airlines? Could make those flight delays lucrative i guess or would folks get off the plane in Europe busted and broke?

DELTA SETS THE BAR IN IN-FLIGHT ENTERTAINMENT...amongst U.S. flag carriers.
Delta, still in Chapter 11 bankruptcy, is seeking to pull passengers on long-haul flights because of the new entertainment system unveiled yesterday - when installation of the seatback system is finished every passenger in coach and 1st class on U.S. flights of 4 hours or more will be able to chose from 20 movies, 24 channels of live TV, 1,600 songs and 10 video games.

Flight from NY start the progam in the next few weeks. By Nov 22 every transcontinental flight by Delta from NY will have the system. It will later be extended to all domestic flights of 4 hours or more from any port.
But movies are not free - but $5 per movie - other entertainments are free however. All together 117 planes will be retrofitted with the system.

"One would have thought European carriers would have been saddled with higher employee costs."

Common American fallacy.

Legacy companies - like big old airlines, car manufacturers, steel makers - get the State to handle most of their social costs in Europe. In the US, the company does it. Not just for today's workers, but for half a century of the downsized. All that American propaganda about crippling European taxes keepes on forgetting how even more crippling it gets to pay the medical bills of 90 yr olds you laid off in 1980.

The European system doesn't inhibit entrepreneurialism (which is why Ryanair is a more professional commercial enterprise than union-controlled Soviet-era hangovers like UAL). And it means BA or Lufthansa can simply run rings round Delta or AA.

"Few US airlines are making profits. That means US travelers are getting good deal"

God help us.
Are all Americans this badly educated? Or is America where all the Marxists have gone, now we've kicked them out of most of Europe?

Isn't the Mayor of London a one-time Marxist or perhaps still a closet Marxist?
If you think Amerika is full of Marxists than think again - even the mention of creeping Socialism here puts chills up peoples' spines - especially politicians who have none.
If politicos here would advocate what UK already has in terms of universal health care that would be their death knell - Hilary Clinton's Health Care Task Fare in the early days of the Clinton Adm proved that.
Think U.K. is still far more pinko than States.

Yes, much remains to be done. We <u>still</u> need to turn all the public road and bridge infrastructure maintenance over to the private sector, as well as the power generating facilities of all those co-ops whose commiepinko slogan is &quot;Owned by the people it serves.&quot; That's just another way of saying &quot;from each according to his ability...&quot;

And i think the whole military should be turned over to Haliburton - Vice will be looking for a job in a few years and should be CEO.