Thread: Skywest
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Old 03-15-2013 | 11:52 AM
  #1913  
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rickair7777
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From: Engines Turn or People Swim
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Originally Posted by Ultralight
Labor is the only controlable cost at an airline. Fuel, maintenance, training, landing fees etc are pretty much the same whichever airline it is.

Now if you have 10 captains on $60,000 a year (G7 for example) and 10 captains on $100,000 a year (Skywest for example) thats a difference of $400,000 for only 10 pilots. $4 million for 100 pilots. Once you get into big numbers like the 3,000 pilots (Eagle for example) you are talking huge sums of money.

AA, Delta, United, U.S Airways, don't really care who flies their feed. They just look at the numbers, and so the whip saw, concessions and under bidding begins.
Mx is controllable, since it has a high labor component and you can shop Chinese junkyards for "re-certified" used parts. If you outsource, economy of scale helps the price.

Training costs can benefit from economy-of-scale.

Fuel (if you buy your own) cab benefit from economy of scale as well as an aggressive purchasing dept which makes use financial instruments such as hedges.