RadioBDC Logo
This Is a Call | Foo Fighters Listen Live
 
 
< Back to front page Text size +

Where does your airline dollar go?

Posted by Paul Makishima, Globe Assistant Sunday Editor  June 8, 2012 11:42 AM

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article


A favorite complaint of travelers involves the cost of airline tickets, with many feeling gouged by carriers. Turns out profit margins for airlines is actually much thinner than most would expect, according to the Wall Street Journal.

The Journal's Scott McCartney asked US Airways and consulting firm Oliver Wyman to crunch the expenses of a hypothetical flight of 100 passengers, each of whom is paying an average $146 fare for a domestic flight, with $18 in fees and add-ons.

And this is the way it breaks down: The biggest expense is fuel, which accounts for about 29 percent of costs. Next comes personnel at 20 percent. After that 16 percent goes to "ownership costs'' (buying and leasing planes), 14 percent to federal taxes and security fees, 11 percent for maintenance, and 9 percent for "other,'' which includes things like catering and "free'' drinks offered to passengers, compensation to bumped passengers, paying to deliver -- or replace -- lost luggage, airport gate and ticket counter rental fees, and advertising and legal fees.

So when you do the math, that leaves a profit of about 1 percent.

Interesting, yes?

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

 
About globe-trotting Travel news, tips, deals and dispatches.
contributors
  • Anne Fitzgerald, Globe Travel Editor
  • Paul Makishima, Globe Assistant Sunday Editor
  • Eric Wilbur, Boston.com staff
  • Kari Bodnarchuk writes about outdoor adventures, offbeat places, and New England.
  • Patricia Borns, a frequent contributor to Globe Travel, writes and photographs travel, maritime, and historical narratives as well as blogs and books.
  • Patricia Harris, a regular contributor to Globe Travel, is author or co-author of more than 20 books on travel, food, and popular culture.
  • Paul E. Kandarian, a frequent contributor to Globe Travel, writes and photographs New England and Caribbean stories.
  • Chris Klein is a regular contributor to Globe Travel. His latest book is "The Die-Hard Sports Fan's Guide to Boston."
  • David Lyon, a regular contributor to Globe Travel, is author or co-author of more than 20 books on travel, food, and popular culture.
  • Hilary Nangle, author of Moon Maine, Moon Coastal Maine, and Moon Acadia National Park, writes about soft adventure, skiing, cultural travel, and food.
  • Joe Ray, a frequent contributor to Globe Travel, writes and photographs food and travel stories from Europe.
  • Necee Regis is a regular contributor to Globe Travel.
archives