What are the distribution of revenue generation for an airplane flight? Would an airline make more money if they stuff in more people in the economy class rather than wasting space for sparsely spaced premium seats?
YouTube’s Wendover Productions makes a rough estimate which clearly shows how airplane companies make real money.
They assume a return flight between London and New York and try to calculate the aggregates of each class of flight. Starting with the economy class, each seat costs about $876. So the total 122 economy class seats would amount to around $106, 872.
Now moving to the $2,633 worth Premium economy seats, 40 of them would fetch around $105,320 for the airliner. Already you can see that approximately 1/3 of the passengers bring in almost the same amount of money as the economy class.
Still, we move on to the business class, where the 48 seats at $6,723 each would amount to a whopping $322, 704.
And finally, the 14 first class passengers at $8,715 each would bring the total of $122, 010! So only the 14 first class seats bring in more money than rest of the 98 passengers combined. And the three premium cabins, accounting for 45% of the total passengers, make up 84% of airline’s revenue!
Of course, no airline in the world makes half a million dollars in a single flight, and these rates are for a direct flight between two high demand and expensive cities. But the ratios for any other flight are the same!
Watch the video below to learn more cool facts about the economics of an airline.
Does not add up. Have you seen how many seats are empty on Business and First Classes Vs Economy? Rarely would a passenger pay $8.7K for the First Class. Most of them would be upgrades on points. Some Govt. people would travel on First Class, but these are heavily discounted. I have flown Business Class on airlines from SFO to DEL (India) for less than $4K. What the articles shows is the published fares, which are ridiculously high. In fact some airlines are getting rid of the First Class because of very low occupancy. Granted in a year, few flights will be fully sold, but if you take the average over a year, economy would beat the upper classes hands down.