The Real start of Low-Cost.

[canyonblue]

Good article on the real start of Low-Cost.

http://www.msnbc.com/news/846211.asp

 

[Race Pilot]

Good article. The one thing I found interesting is the remarkably low break-even load factor for SWA. Based on what some folks have said on these forums about airline costs, SWA must not pay their pilots anything if their costs are that low.

 

[AKAAB]

Don't forget...Airbus pays JetBlue Pilots' salaries!

AKAAB

 

[CoopDog]

Cost comparison

Since we're talking about costs here, let's take a look at these interesting facts per Morgan Stanley:

The estimated cost for Southwest to make a 1,100 mile flight is $9,861. That's about 36 percent less than the industry average of $15,516. While JetBlue registers cost below the average, United's on the otherhand, top the scale at $21,428, more than double SWA.

On a typical 2,700 mile trip, pilot wages account for $7,259 of costs at US Airways and $6,342 at United. For the same trip on Southwest, pilots account for just $2,931 of the expenses. (No figures mentioned for JetBlue).

"The difference at the big carriers must either be passed on to the consumers in the form of higher fares or be deducted from revenues."

Source: Air Force Magazine, Feb., '03 issue, "Grim Days for the Airlines" by Richard Newman.

 

[rapidD]

Coopdog

Interesting figures.....and more interesting that they were contained in an article by Air Force Magazine. Looks like the boys in blue are trying to retain their guys with a little well-placed and timely propaganda.

rapidD (ex-USAF)

 

[cl65@350]

uhhhhh....can someone break down the math on that one! i dont think pilot wages are THAT high on a 2700 mi trip.....even with benefits included!

 

[NYRANGERS]

Re: Cost comparison

Since we're talking about costs here, let's take a look at these interesting facts per Morgan Stanley:


On a typical 2,700 mile trip, pilot wages account for $7,259 of costs at US Airways and $6,342 at United. For the same trip on Southwest, pilots account for just $2,931 of the expenses. (No figures mentioned for JetBlue).

"Source: Air Force Magazine, Feb., '03 issue, "Grim Days for the Airlines" by Richard Newman.

Interesting, so a US Airways captain makes around $800 to $900 dollars an hour? Richard Newman must be from the Enron school of economics. $7,259 for pilot wages on a 5 1/2 hour flight might just be a little high.

 

[discon-disco]

In that same article, the author attributes part of Southwest's success to the pilots being nonunion. Say what you will about SWAPA, but they are unionized. That bit of obvious misinformation completely discredited the article in my mind.

 

[Midnight Mike]

Good information! Pretty amazing that the average airline load was 73.8%, that would mean that 75% of the general public is flying. I guess they are not scared to fly afterall.

The scary part was seeing some of the airlines break even factors, sheesh, I new about Uniteds, but I never knew the numbers of the other airlines.

I guess the Southwest model of flying "1" type of aircraft really works, amungst the other things that Southwest does. I am sure that you will see Jetblue numbers come down as well, some of their cost are for start up cost, but still their loads are impressive!!

I still can get over that United needs a 90% load factor just to break even, so in theory, if United sells 100% of their seats, the most they can make is a 10% profit....

 

[Publishers]

costs

There are many factors that make up the costs and each company may do it in a different way.

As example some may keep training costs on one way versus another.

SWA keeps their costs down by good controls, productivity, single aircraft type and training, insurance, etc. etc.

Throwing out an article like this means nothing unless you really get everyone on a common accounting system.