Posted: Tue Feb 21, 2006 4:41 pm
Also, let me emphasize one of the points I was making above again because I think I buried it too well within all the rest.
Everyone else responding to this thread is operating a VA that is what is called within the US a "Major" carrier. That's a pretty big airline, usually with a fleet of several hundred aircraft, many of them being in the 200+ passenger class. Many of your airlines are also international carriers, meaning that you make long-haul flights like New York - London with (again) 200+ passenger aircraft.
I'm just a small cargo (or soon to be cargo) airline that is flying passengers in the meantime that is designed to operate in a fairly specific niche - regional service. GMA (the parent company) is still a regional airline, only serving destinations within the Eastern US, much like the old Northeast Airlines, or Piedmont Airlines. We have a few (7) 757s as our big planes for hauling trunk routes between our hubs, but most of our aircraft are MD-88s and smaller, each fitting its own niche. I'm starting with 5 C208s to cover the 15 flights that are in the route schedule (which is exactly how many planes are needed to cover those flights because of their setup). I will expand once I get more pilots to cover the addition routes, but for the forseeable future, the biggest plane that we'll be flying is the C208 and then a trio of YS-11A-200 cargo aircraft (again) once we get enough pilots and the additional routes served will be only the number that can be handled by those 3 airplanes.
Here's where the current money system makes the most impact -
I fly one of my flights. I have 5 passengers that pay $85 each. Because I have enough fuel, I don't have any fuel cost. My profit (which is maximized) is $315 (pre-modifier). My ticket price is low becuase I'm not going very far, but it's still a 1.5 hour flight.
Ionathan flies a flight with a 767-300. They have 200 passengers paying $150 each because in that same 1.5 hours, they can go twice as far or more. They take on 6700 gallons of fuel at $2.14/gallon. Catering costs (guessin' here) about $500. That means that off that, you're at -
$30000 from tickets
- $14388 for fuel
- $500 for catering
= $15112 profit.
Now, you pay your crew 10% of the profits, so the profit is now -
$15112 profit
-$1511.20 crew pay
=$13600.80
So, on one 1.5 hour flight, I made 43 times LESS money prior to the multiplier simply because I'm flying smaller planes on a smaller route.
It also means that my profit margins are MUCH less than what yours are because your ticket revenues are higher per passenger (by a long shot) and the number of passengers you can carry are larger, so your profit margin is going to be much higher because (again) cost of operating the airplane isn't figured into the mix. Now, my C208 costs $400/hr to operate, that 767 costs $10,000+ an hour to operate, see how that evens things out a lot? Now I'm making a slight loss because my ticket prices are too low, but it also means that the 767's profit margin isn't higher simply because it carried more people as it is now because the increase in costs is not proportionate to the increase in capability of the airplane.
Everyone else responding to this thread is operating a VA that is what is called within the US a "Major" carrier. That's a pretty big airline, usually with a fleet of several hundred aircraft, many of them being in the 200+ passenger class. Many of your airlines are also international carriers, meaning that you make long-haul flights like New York - London with (again) 200+ passenger aircraft.
I'm just a small cargo (or soon to be cargo) airline that is flying passengers in the meantime that is designed to operate in a fairly specific niche - regional service. GMA (the parent company) is still a regional airline, only serving destinations within the Eastern US, much like the old Northeast Airlines, or Piedmont Airlines. We have a few (7) 757s as our big planes for hauling trunk routes between our hubs, but most of our aircraft are MD-88s and smaller, each fitting its own niche. I'm starting with 5 C208s to cover the 15 flights that are in the route schedule (which is exactly how many planes are needed to cover those flights because of their setup). I will expand once I get more pilots to cover the addition routes, but for the forseeable future, the biggest plane that we'll be flying is the C208 and then a trio of YS-11A-200 cargo aircraft (again) once we get enough pilots and the additional routes served will be only the number that can be handled by those 3 airplanes.
Here's where the current money system makes the most impact -
I fly one of my flights. I have 5 passengers that pay $85 each. Because I have enough fuel, I don't have any fuel cost. My profit (which is maximized) is $315 (pre-modifier). My ticket price is low becuase I'm not going very far, but it's still a 1.5 hour flight.
Ionathan flies a flight with a 767-300. They have 200 passengers paying $150 each because in that same 1.5 hours, they can go twice as far or more. They take on 6700 gallons of fuel at $2.14/gallon. Catering costs (guessin' here) about $500. That means that off that, you're at -
$30000 from tickets
- $14388 for fuel
- $500 for catering
= $15112 profit.
Now, you pay your crew 10% of the profits, so the profit is now -
$15112 profit
-$1511.20 crew pay
=$13600.80
So, on one 1.5 hour flight, I made 43 times LESS money prior to the multiplier simply because I'm flying smaller planes on a smaller route.
It also means that my profit margins are MUCH less than what yours are because your ticket revenues are higher per passenger (by a long shot) and the number of passengers you can carry are larger, so your profit margin is going to be much higher because (again) cost of operating the airplane isn't figured into the mix. Now, my C208 costs $400/hr to operate, that 767 costs $10,000+ an hour to operate, see how that evens things out a lot? Now I'm making a slight loss because my ticket prices are too low, but it also means that the 767's profit margin isn't higher simply because it carried more people as it is now because the increase in costs is not proportionate to the increase in capability of the airplane.