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Old 07-18-2021 | 05:00 PM
  #262  
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Originally Posted by RIPV3
Will Spirit be able to maintain low ticket prices when more people are staying for a career rather than using it as a stepping stone (with all the associated increased employee costs), then throwing the desired legacy pay rates on top of that?
Still a growth airline which means most seats will be occupied by crew on the low end of the pay scale. And that will be true for quite some time whereas the legacies are largely static in size.

There are also other economies of scale that kick in as NKS gets larger, and Spirit does some thing like airframe usage, contract ramp crews and low paid, high turnover cabin crews that legacies can’t do for a variety of reasons.

Also, some simple math that may or may not mean anything...

To generate an extra $1500 a day in revenue ( $50 dollars an hour more for both seats x 5 hours min guarantee x 3 crews) on a single 182 seat plane requires an extra $8.24 per ticket for a single flight. But, let’s be generous and say each tail is flying an average of 6 legs a day. So really it’s an extra $1.37 per seat. Let’s be further generous and say we’re only operating at 85% capacity. That raises it to a whopping $1.61 a ticket.

Thats big, round number math, but basically one flight a day of WiFi sales covers the cost. Yes, some things like OT, and higher DC 401k costs go up as well, but the larger point is that a significant raise is a rounding error in the greater scheme. Especially as everyone starts tripping over themselves to attract talent.

Thus endeth the lesson.
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