- What makes up the price of air transportation
- Why are the prices for air tickets going down?
- How do airlines make money?
On a day off, you can be allowed to talk not about work, but for the soul about money, namely why air tickets are expensive.
Summer is a season of vacations and travel, but not for everyone. According to official statistics, last year 12.1 million people, or 8.2% of the population, traveled abroad.
This is a small figure. For comparison, in 2017, according to the state travel agency, more than 87 million US residents, or 26.7%, went abroad. Half of this number came from trips to neighboring countries – Mexico and Canada. Over the past few years, this statistic has been growing by 8-9% annually. Americans have awakened a craving for travel and have funds for them.
The British can generally be called traveling frogs. The Office of National Statistics reports that in 2017, 65.6 million UK residents accounted for 65.7 million overseas travel. Unfortunately, in Britain they prefer to measure not in people, but in travel. In any case, the figure is impressive.
The reason why people in Russia prefer a sofa over resorts is by no means in love for home gatherings. For most, unpleasant discoveries start with airfare prices.
It is believed that airlines out of greed set high prices for air tickets. In fact, this is not the case. Unfortunately, most of the calculations will be based on the example of the United States, since the same Kennedy Airport in New York openly publishes taxes and fees, unlike Sheremetyevo. In any case, air travel is a close business, everyone flies on Boeing and Airbus and everywhere is about the same schemes.
What makes up the price of air transportation
One of the most common aircraft is the Airbus A320, which began production in 1987.
In 2014, the company made an update and introduced the updated Airbus A320 with the neo prefix. And if there are already more than 10,000 classic A320s, then the neo account is no more than a few hundred. However, one of the advantages of the new version is its cost effectiveness. And many, probably by analogy with motor transport, believe that the most expensive component is the price of aviation fuel. And this misconception is easy to explain. If you look at the technical specifications, planes burn a huge amount of fuel. For example, a320neo will burn about 2500 liters during the flight between St. Petersburg and Moscow alone.
In the classical style, the fuel consumption per 100 kilometers for aircraft is not entirely correct, since the fuel consumption depends on many factors – the weight of the aircraft itself, age, altitude and weather conditions, speed. However, it can be assumed that conventionally the aircraft burns 3.7 liters per 1 kilometer, or 370 liters per hundred. Looks impressive compared to the traditional 6 liters on the track, right? But the car will fit 4-5 people, while the A320neo can accommodate up to 160 passengers.
Therefore, the aviation industry uses a different metric: fuel efficiency per passenger. According to this indicator, it turns out that Airbus spends about 2.5 liters per 100 kilometers. According to the Bureau of Transportation Statistics in the United States, the price of 1 gallon of aviation fuel averages $ 2.05 for the first five months of 2018, or 34.56 per liter.
It turns out that if only fuel is taken into account, then one passenger costs about 500 rubles for a flight from St. Petersburg to Moscow.
For a New York-Washington flight, which has an average price of $ 80, that's about $ 3 per passenger. For the work of the attendants and pilots, you should add about 2 more dollars per person on top.
Total $ 5. Question: is the airline putting the remaining $ 75 in its pocket?
Of course no. Companies need to 'recoup' funds spent on the purchase of equipment, that is, we are talking about depreciation and maintenance of the aircraft.
The service life of the aircraft is estimated in cycles. A cycle is one takeoff and landing.
From a technical point of view, it doesn't matter how long the plane spent in the air, whether it flew 10 minutes or 10 hours. The main damage is done when the pressure changes, due to a change in which microcracks form on the body in the places of the rivets.
Because of this, by the way, on long-distance flights you can find 'older' liners. And on local flights, the planes are usually newer. The manufacturer gives a guarantee for a certain number of cycles. In the case of the Airbus A320, this is 60,000 cycles. It turns out that to calculate the approximate depreciation, you need to divide the price of the plane ($ 107 million) by the number of cycles (60,000) and by the number of passengers (160). Total: $ 11 per person.
However, in addition to depreciation, there is also the cost of maintenance. For one flight, the airline spends $ 2,100 on technical staff, spare parts and quality control. It turns out $ 13 per passenger. Using the example of Delta Airlines, we can say that the maintenance of an office responsible for the administrative component of the business costs about $ 10 per passenger.
Airports that provide infrastructure are next in the value chain. Fun fact that the airport rates planes by weight, for example, JFK has a tariff of about $ 7 per 1,000 pounds, or 453.5 kilograms. The A320neo, which weighs £ 172,000, costs $ 1,089, or $ 7 per person. Total $ 14, as you have to pay both the airport of departure and arrival.
If you add up all the running costs – $ 3 for fuel + $ 2 for personnel + $ 14 for airports + $ 11 for depreciation + $ 13 for maintenance + $ 10 for administrative costs, you get $ 53.
And then the regulatory authorities come into play, which offer to pay various types of taxes and duties. In the United States, the state takes 7.5% of each ticket, plus a tax of $ 4 for each take-off; after September 11, an additional security contribution of $ 5.6 appeared in the United States. Customs takes another $ 5.50. There are various environmental taxes on international flights. For example, on a New York-Paris flight, it costs $ 17.7 and separately another $ 5.5 in animal and plant protection. For a short flight New York – Washington all taxes will be $ 21 per person.
Thus, it turns out that out of $ 80 for a ticket, $ 53 will go to technical needs and administrative costs, and the state will take another $ 21. It turns out that in this case the airline's profit will be only $ 6-10 per person, or $ 1,600 per flight. Of course, all these calculations are more or less correct, provided that the plane was flying at full load.
Why are the prices for air tickets going down?
The net profit from the calculations above is 8-12%, ideally. I think now it is also becoming clear why airlines are selling more tickets for a flight than the plane can accommodate. With such a thin margin for the carrier, there is nothing worse than getting an underloaded plane, as this automatically means a loss. Airlines often, in an effort to 'fill' the plane as much as possible, sell 'last minute tickets' at a loss, because if no one flies, the economy will be even worse.
However, despite the fact that airlines have minimal profits, ticket prices are constantly decreasing. The main reasons are competition, cost optimization and, of course, advances in aircraft construction. Manufacturers use new composite materials, more economical and durable engines. They are also working on the shape of the aircraft. One example is the use of winglets, or vertical cusps, on the main wing. This at first glance primitive invention made airplanes 15-20% more economical.
The essence of the 'wings' is that they serve as a kind of barrier between air currents. When an aircraft is in flight, a high pressure zone forms under it, and a low pressure zone above it. Air currents from below, moving from the nose to the sides, collide with currents from above, as a result of which the so-called end vortices are formed, which negatively affect aerodynamics.
How do airlines make money?
However, business would not be a business if it were not trying to get out. The airlines decided that they could sell tickets to different categories of buyers at different prices.
The idea is that if the buyer is willing to pay more, then they should not be deprived of this right. For example, if the trip is a business trip, then the passenger does not think much about how much the ticket costs, since the employer pays. Often, for business, it is not the specific cost of the ticket that comes to the fore, but the services around it. For example, the ability to return or rebook a ticket for another date without penalties. Airlines have many methods and algorithms for distinguishing an ordinary traveler from a business traveler. This is the deadline before departure. Often, tourists prefer to buy a ticket in advance, but business travelers can hit the road at the last minute. Or, for example, business travelers prefer to return home for the weekend, while a tourist may be flattered that Saturday flights are usually cheaper.
And when buying a ticket on the site, a system may operate when, based on the information available from your device, certain extra charges are added. The tradition is that users Apple are willing to pay more.
Also, airlines have a huge number of fares. Delta Airlines has 14 different fares in Economy Class. By the way, this is the reason for constant changes in the ticket price – yesterday it was 2 rubles, and today it is already 3. So, the seats in the cheap fare have run out.
In Russia, the issue of competition also affects ticket prices. Today we have one major airline with the best destinations. And if there are no rivals, then it is illogical to reduce prices.
Sometimes from the outside it seems that in this area of business companies should make money by carriages, but upon closer examination it turns out that the grass on the other side is always greener.
This material was made possible by Wenover Production, an English studio that produces educational videos and texts.
In the comments, share the secrets of how and where you buy tickets. Tell us how much the most expensive ticket cost and where you flew. For myself, I can say that I did not have air tickets more than 60 thousand. In my opinion, for this amount you can fly to almost anywhere in the world.
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