I beg to differ…

https://www.investopedia.com/the-fou...t-year-8781856

 

Just because you found somebody who is willing to print an article that has the same completely stupid conclusion, doesn't make it so!!!

The airlines sell stuff to generate revenue....
Their customers buy stuff to travel places.....

To state a "profit" based on the money generated on the revenue side (miles sold to CC) without pulling out the costs associated with the travel "purchased" to generate that revenue (seats purchased with miles) shows a complete lack of understanding of the business.

It is like saying the NFL is massively losing money with their games, the only reason they make money is because of the TV contracts. How much of the player's salaries are precisely due to the TV contracts? We don't know for sure, but since the player's salaries are tied to a percentage of the revenue, the NFL's costs do go up when they "sell" their product to the TV Networks (just like airline's costs go up when they sell CC miles).Yet nobody says the NFL is losing money!!!!

Or how about we go the other way.... The airlines would be massively profitable except they keep spending Billions on Fuel.
See, if you can pull out a line item on the revenue side and say without it, the airlines would lose all sorts of money... I can pull out a line item on the cost side and say without that, the airlines would be massively profitable.... Each of those methods are equally stupid!!!!!

 

Why are you guys arguing like any of this matters? It’s got “my dad can beat up your dad” energy.

Pro tip: don’t come to jetblue. Or delta, or united, or alaska… cuz pilots everywhere are tools.

 

https://m.youtube.com/watch?v=ggUduBmvQ_4

 

Not really.

This is because the person that wrote this article doesn't understand CASM and RASM, how they are reported and what they actually are.

CASM include fuel, a large expense. But almost every flight on Delta and United have cargo. United alone carried 1.3B pounds of cargo in 2024. It made $1.7B in cargo revenue. Moving cargo is not free. There is labor involved as well as extra fuel costs. These fuel costs are rolled into CASM, because ALL fuel affects CASM. Cargo revenue is NOT part of RASM. Its a separate line item WITHOUT an associated fuel cost.

Delta reports cargo revenue in the same fashion, with excess fuel costs fully included in passenger CASM, since the cargo is also on the plane with the passengers.

Guess what else? United and Delta also have fuel costs to carry ALL those people that redeemed credit card miles. So the costs are rolled into CASM, but the credit card revenue is NOT included in PRASM. That's part of a separate income statement item called "other revenue".

Without cargo revenue AND without credit card revenue, both United and Delta would have MUCH lower CASM because they would not be burning all this extra fuel. To put in perspective United carried 1.3B pounds of cargo in 2024. It costs a ton of gas to carry 1.3B pounds an average stage length of 2,500 nm, which is where most of the cargo revenue is on International Flights.

So without cargo revenue (which the fuel costs are mixed in with passenger CASMs) and then without credit card revenue (also which ALL fuel costs are calculated in with passenger CASM), both Delta and United would have far less costs.

Yes cargo and credit card revenue is substantial, but the costs are also substantial and unless you understand how airlines report the costs, they are not fully activity based for GAAP purposes, which would be more intuitive if they were.

Credit card companies are not just throwing a bunch of money at airlines. There is a cost to all of it that would go away if the revenue went away almost proportionally.. Same with cargo.

 

This proves true. There were seats to be had. The key to winning is minimize lose when you’re beat and maximize when you win. We can’t make money because our airline had ADHD. We change strategies too quickly

https://www.transtats.bts.gov/Data_Elements.aspx?Data=4

 

Yesterday (6/19) had the third highest TSA passengers numbers to date at 2.98 million passengers. What is this weakend demand they speak of.

 

People wanting to travel on Saturday and Sunday perhaps??? 😬

 

Now do March. That’s what they’re talking about. The troughs.

 

No. JG just sent out a jet to the point highlighting how we continue to shrink, because of weak demand.