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saurabhm_101 · Member Joined: 19 Dec 2006 Posts: 529 Location: Mumbai

suppose i own a airline (i wish lol!) and i have a Boeing 737-800 with say about 160 seats (only economy)... my airline is a full service airline so my tickets are also priced at about 4500 INR including taxes (one way say a BOM-DEL route) so that means about 3750 is what my airline keeps... but after all other fees i pay like parking, landing, fuel etc etc. how much does my airline actually record as profit? just curious...

thanks

cheers!
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AKLDELNonstop · Member Joined: 19 Dec 2006 Posts: 1066 Location: Auckland

Lets try to work this one out, I dont have all details so lets see how far I can go and someone else can continue.

No of Seats = 130 ( Economy)
Revenue/Seat = INR 4750
Total Revenue for class = INR 617500

No of Seats = 20 (Business)
R/S = INR 15000
Total Revenue for class = INR 300000

Total flight revenue = INR 917500

Taxes/Seat = INR 1250 (for J and Y; assumption offcourse)
Total Taxes = INR 187500

Landing+Parking = INR 20000 (Assumption again)
Cost of Y meal = INR 26000( at Rs 200 a meal)
Cost of J meal = INR 20000( at Rs 1000 a meal)

Fuel = I have no idea

Surplus+ Fuel Costs = INR 664000
= USD 14755

I guess now all depends on fule costs. Can someone add tht in and make relevant changes
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karatecatman · Guest

VABBy · Member Joined: 19 Dec 2006 Posts: 823 Location: DEL

What do u reckon will you be able to sell seats at INR4500 ?? Second question will you sell all your seats at the fare level mentioned by you??

Sorrie for killing the enthusiasm here but this aint simple plain game of numbers where u calculate the revenue and substract the expenses giving u a profit.

Airlines have specialized software to carryout yeild management . There are certain fixed costs also which would make operating a single aircraft expensive rather than a fleet which wud spread the fixed cost.
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saurabhm_101 · Member Joined: 19 Dec 2006 Posts: 529 Location: Mumbai

VABBy im no business man... i dunt know about airline management... the question was just a general question... and yess tickets do sell at 4500... IT does it... thats not the point... i just a general question... and the special 'software' i do not have otherwise i wouldn have bothered asking... and 1 aircraft doesnt mean throughout my life im gona stick to 1 aircraft... its the start... yes price is high for a start... its a simple question... nothing more...
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AKLDELNonstop · Member Joined: 19 Dec 2006 Posts: 1066 Location: Auckland

aware of it VABBy. Just trying to figure out approximations.
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JumboJet · Posted: Thu Jan 11, 2007 9:17 am Post subject:

Good Luck Saurabh. Very Happy

For i know people who think of starting operations on the BOM-DEL sector have two things : Deep Pockets and yes Sure Fire Contacts. Glad to know someone with a heart of steel is a part of our forum. I shall try and give you the fuel calculation chart in a day or so.

BTW we hope there is a scheme of staff like travel on your plane for us AInutters Twisted Evil

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Karan69 · Member Joined: 22 Dec 2006 Posts: 1334

Hey nice post Saurabh, but lets make it a bit more realistic.

I am too lazy to do the calculations but ill state te numbers.

130 Economy seats--sell them at different rates

25 seats at deep discounted y fare 2200 INR

15 seats at next discount level of 2800 INR

30 seats at next level of 3500 INR

30 seats at next level of 4500 INR

20 seats at nect level of 6200 INR

10 seats at full fare 7900 INR

Business class fares go between 11,500 and 13,000 24 seats

Fuel surcgarge 750 congestion 150 Govt taxes 220

Landing rate 125- 150 USD [LHR is 300 GBP for heavies] --Assumption

Fuel --Jumbo jet will tell us but 738 burns about 3 tonnes an hour.

Karan

saurabhm_101 · Member Joined: 19 Dec 2006 Posts: 529 Location: Mumbai

assuming the flight is full... (yeah my airline is awesome! lol) it comes to be INR 8,28,000 no this is with the numbers given by Karan. if i add 750 to each tickt it comes to 9,43,500... thats like 115500 in taxes....

so we still have:
food
parking
taking off charge
ground service charges (are they included in parking charges?)
miscellaneous charges (if any)

if the flight is about 1 hour 40 mins (flying time) that means it will burn 5 tonnes... i have to put about 7 maybe 8 tonnes incase of emergency?

thanks alot guys...

cheers!
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COUGAR · Member Joined: 01 Jan 2007 Posts: 986 Location: Bangalore

Ok let me take a shot at this!

Assume a schedule with a single A320 aircraft doing the following sked:
Flight #- From - To - Dep - Arr
SM401 - BOM - DEL - 0700-0855
SM402 - DEL - BOM - 0930-1125
SM403 - BOM - DEL - 1200-1355
SM404 - DEL - BOM - 1430-1525
SM405 - BOM - DEL - 1600-1755
SM406 - DEL - BOM - 1830-2025

So 6 round trips a day. Assume a similar sked being flown by a aircraft based in DEL.

Then I would decide the break-even factor for a particular flight. i Prefer to be pessimistic rather than optimistic in this regard.

So depending on the timing I would set the break even factor. An early morning 7am departure or a 1830 departure will obviously have better loads than a 1200 or 1430 departure. It would also depend on day of the week. Foreg on a sector like PNQ-BLR loads are higher on Fridays eveings and Mondays mornings.

I would then divide the operating cost of the flight by the MINIMUM SEAT FACTOR (say 60% occupancy=108 seats). That would give me the base fare which would typically work out to something like 3600 for a 2 hour flight. This is the lowest AVERAGE fare I would sell a seat. I will recover my cost if even 60% of the seats are sold. The rest is profit!

Then I come up with the concept of fare buckets: each bucket will have a certain number of seats avialable for sale at a certain price. The number of seats sold in a certain bucket will depend on factors like flight time, season and historical sales records. So i will have buckets named K,L,M,N and O with a decreasing cost, with L being typically my "AVERAGE BASE COST" and N and O buckets being sold BELOW COST. I obviously want to reduce the number of seats sold in buckets M,N and O. I would also open and close Fare buckets for sale from the date of opening of flight bookings to flight date. So i wouldnt START with bucket O, but with K, slowly open up L,M,N and O, and temporarily close individual buckets for sale depending on sales figures. As flight date approaches and if seats in higher buckets are remaining unsold, I could shift unsold seats in higher buckets to lower ones to ensure sale. Ofcourse I would need a fundoo software to do all this for me, which shouldnt be too difficult since that is what i do right now for a living! Smile

So for an early morning flight which I am reasonably sure of filling up I might not offer a SINGLE seat in these Below cost classes. However an empty seat is no revenue and i rather have SOME revenue rather than none. So for a noon flight, I could offer a certain percentage of seats, which could go upto 50% or even 60% in the 4 lowest classes: its all about maximizing yield by filling up the plane as much as possible at the best possible returns.

Then I would fix the absolute minimum on each bucket on various flights which HAVE to be sold and sit on the heads of my marketing team to ensure that those targets are met!!

IC sells over 60% of its inventory in buckets L and above (that is base cost), while 9W sells 60% of its inventory in the discounted classes. Which explains IC's profitability and 9W's losses. The extra pax they carry is at the expense of yields!

I am not factoring in the cargo revenue: an A320 scores over a 737-800 in this field, since it is able to carry a heck of lot of cargo in the forward bay. Cargo revenue is significant enought to be mentioned.

Ofcourse I have heavily over-simplified the process, but I hoped this helped clarify things!
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Karan69 · Member Joined: 22 Dec 2006 Posts: 1334

Hey Saurabh,

Parking charges at LHR go for 20 GBP per 15 mins so thats 160 GBP for a 2 hour slot at the aerobridge, so i dont think domestic carriers will be paying more than 100-120 USD for 2 hours at DEL BOM.

As i mentioned about landing charges at LHR being 300 GBP for Heavies it should not be more than 125-150 USD at BOM DEL.

Food costs 8-12 catch an average of 10 USD per economy meal and a 2 hour bussiness class meal could cost 18-120 USD [Remember you are not KF on domestic and do not want to be like them also]

Ground service charges someone like MEL and DABTH can give you a better idea

Also dont forget revenue from the two biggest and easiest and most convinient profit making means Cargo and Excess baggage---i think the charge is 500-1000 per KG on interational so i guess we can half that for the domestic rate and MEL again should be able to give us the freight rate.

Miscellaneous Expenses ---if the flight is delayed---even an extra round of drinks can run you 75 USD.

Karan

the_380 · Posted: Thu Jan 11, 2007 10:58 pm Post subject:

Dude i'll be sure to fly ur airline Wink

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AKLDELNonstop · Member Joined: 19 Dec 2006 Posts: 1066 Location: Auckland

Are we going back to the days of trying to start our own airline? hehe was fun the last time.

Cheers
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Karan69 · Member Joined: 22 Dec 2006 Posts: 1334

the_380 · Posted: Fri Jan 12, 2007 11:07 am Post subject:

saurabhm_101 · Member Joined: 19 Dec 2006 Posts: 529 Location: Mumbai

thanks for all your replies.... i was thinkin (surprising! i know!! lol) but what if we configure the aircraft to carry like 50-60% PAX and the rest cargo? like maybe in front of the wings we keep PAX and behind the wings ALL cargo? will i get good revenue out of this? i was also thinking of a rather cheaper fare for say standing class... with handles just like on the mumbai locals! (no im not joking!) well actually i am! haha! but it would be a fun idea... imagine this...
Capt: ''Ladies and Gentlemen in the sitting class please fasten you seat belts and people in the standing class please kneel in the brace position we will be landing in a few minutes! thank you!''

F/A: (after landing before parking):''Ladies and Gentlemen in the sitting class please be seated until the aircraft comes to a complete halt. People in the standing class please remain where you are and do not rush to get out... this is not a local train and no we will not stop here just for 10 seconds so please do take your time and thank you for flying .......... Airways. We wish you a happy stay and look forward to seeing you fly with us.''

haaaahaaaa!!!!! im going to soo have this on my airlines!!! Very Happy

will take air deccans case!!! haahh

thankss! cheers!
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the_380 · Posted: Fri Jan 12, 2007 5:40 pm Post subject:

himmat01 · Member Joined: 19 Dec 2006 Posts: 1392 Location: DEL

Read this.

http://www.nytimes.com/2006/04/25/business/25seats.html?ei=5088&en=92a5789e32d4e8e6&ex=1303617600
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