Heres the Letter from Misner to XJT Regarding SKW
04-28-2008, 06:45 PM
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Originally Posted by tpersuit
50-seaters will make more than a 70-seater and 90-seater anytime there is less than 55 seats sold.
You forget that 15 seats sold on the 70-seater is the same as the 50-seater (minus first class of-course). The 70-seater costs more per hour, gas and cost of the plane (its newer and bigger)
You forget that 15 seats sold on the 70-seater is the same as the 50-seater (minus first class of-course). The 70-seater costs more per hour, gas and cost of the plane (its newer and bigger)
It turns out that the additional cost of the 70 (or 90 seater) is very slight compared to the 50 seater. The exact numbers vary between airlines and aircraft, but a 70 can carry 40% more revenue pax plus cargo and probably only costs 5-10% more to operate. Since competetive pressures will force full flights, you're not going to be operating many empty airplanes.
In those few niche markets where competetion does not exist, you can operate half (or less) filled flights and simply charge the pax the actual value of the service...50 seaters are fine on those routes.
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