What does your airline ticket pay for? In order of size, these represent the expenses for a US Airways flight according to WSJ journalist Scott McCartney:
- Fuel (close to 30%)
- Salaries (maybe 20%)
- Buying and leasing planes (16%)
- Federal taxes (14%)
- Total maintenance (11%)
- Other including food, lost luggage, bumping people off flights (9%)
But, the cost to fly one seat one mile does vary considerably. For Southwest it is 12.96 cents while Delta, at 14.76 cents, is close to 14% more.
Or, we could look at “load factors.” Again, Southwest needs fewer people on a plane than any other airline to exceed its break even point.
This takes us to airline industry profitability:
And finally, our graph takes us to Richard Branson: “How do you become a millionaire? Start as a billionaire and then buy an airline.”
For information on the airline industry, WSJ journalist Scott McCartney is a good columnist to follow. Here and here are McCartney articles I used for airline data while Seeking Alpha, here and here, provided a thorough analysis of the industry. My graph was from Business Insider.