Where Does Your Airfare Go?

If plane had 100 seats, only one would go toward profit
By Mark Russell,  Newser Staff
Posted Jun 10, 2012 1:20 PM CDT
A Virgin Atlantic plane ready to be boarded. People complain about travel costs, but airlines have very little margin for error, according to a Wall Street Journal analysis of costs.   (Flickr)
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(Newser) – Long lines, lost luggage, bad food, extra fees, and oodles of delays—with all of our complaints about air travel these days, you probably think the airlines are making scads of cash from your airfare. But, it turns out, you probably think wrong. In fact, if a hypothetical domestic flight had 100 seats and each ticket cost $146 (the US domestic average for one half of a round-trip flight), it would take the airline 99 paying customers to break even; only one seat would be its profit, according to some number-crunching led by the Wall Street Journal.

The biggest cost is fuel, taking about 29 seats (although other research puts fuel as high as 34% of costs), followed by salaries at 20 seats. Ownership costs (buying and leasing, as well as insurance) are 16 seats, government taxes and fees another 14, and maintenance 11. Nine seats were labeled "other," for catering, gate fees, lost baggage replacement, and the like. That leaves just one seat left for the airline. "It's a crazy business," said one former airline CEO. "There are so many costs you could never articulate it all." (Read more airline industry stories.)

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