canadflyau
Well-known member
- Joined
- May 2, 2002
- Posts
- 437
" That statement is not entirely correct. While fuel is usually slightly higher than pilot salaries, total labor costs (wages and benefits) are by far an airline's largest expense."
Actually I am correct, but you are correct that neither make up the largest percentage of CASM.... I should have been more clear when I say "total labor costs" I mean frontline labor, the ones you can actually see and/or have contact with at the airport (the so called "little guy") that does the physical work that generates the revenue... not the labor that sits at the G.O. and makes no contact of anyform with the customer or directly with the product (i.e. HR, Marketing, Standards and Compliance, Safety, Quality Assurance, and the gobs of other suits and sweaters behind the scenes)
Its this simple, take a look at an hour.. a 50 seat SJ... lets say in 1 hr they can utilize 300NM.. in 1hr they pay the FO and Capt a combined $150/hr (including bennies) a cost of =.01 to CASM
Lets say the SJ burns about 2,000 lbs during 1hr with a cost of anywhere from (hedged or unhedged) $300-600/hr making up anywhere from .02-.04 to CASM, so fuel costs by my calcs are more expensive than a generous $150 the crew costs towards CASM.
I don't fly an SJ so my numbers are estimates, but that shows that if I am ballpark even with a super senior ASA crew, they are not a commanding part of the CASM.
As for the RASM lets say you operate at 65% load factor, thus 32.5 Seats are filled @ $60 per segment you have .13 RASM. FYI the CASM at JBLU-SWA is anywhere from 6.5-8.5, DAL casm is approx 8.8 and AMR is approx 8.7
Actually I am correct, but you are correct that neither make up the largest percentage of CASM.... I should have been more clear when I say "total labor costs" I mean frontline labor, the ones you can actually see and/or have contact with at the airport (the so called "little guy") that does the physical work that generates the revenue... not the labor that sits at the G.O. and makes no contact of anyform with the customer or directly with the product (i.e. HR, Marketing, Standards and Compliance, Safety, Quality Assurance, and the gobs of other suits and sweaters behind the scenes)
Its this simple, take a look at an hour.. a 50 seat SJ... lets say in 1 hr they can utilize 300NM.. in 1hr they pay the FO and Capt a combined $150/hr (including bennies) a cost of =.01 to CASM
Lets say the SJ burns about 2,000 lbs during 1hr with a cost of anywhere from (hedged or unhedged) $300-600/hr making up anywhere from .02-.04 to CASM, so fuel costs by my calcs are more expensive than a generous $150 the crew costs towards CASM.
I don't fly an SJ so my numbers are estimates, but that shows that if I am ballpark even with a super senior ASA crew, they are not a commanding part of the CASM.
As for the RASM lets say you operate at 65% load factor, thus 32.5 Seats are filled @ $60 per segment you have .13 RASM. FYI the CASM at JBLU-SWA is anywhere from 6.5-8.5, DAL casm is approx 8.8 and AMR is approx 8.7
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