This Is Why Airlines Make No Money From The Economy Class

If you are one of those people, who can’t stop bitchin’ about how bad your plane’s economy class is; this might make you dial down your skepticism. Or maybe just help you understand that it’s all related to capitalism and nothing personal!

How is the revenue generation distributed among different airplane classes? Wouldn’t the company make more money if they stuff in more people into the economy class instead of wasting the precious plane real estate on the widely spaced premium seats? It turns out all of our basic instincts about the plane economics are absolutely WRONG!

This video by YouTube’s Wendover Productions allows us to make a rough estimate on how the each tier contributes to the revenue generation, and how airplane companies make real bucks.

The video takes a return flight between London and New York and calculates the gross amounts brought in by each class of flight. Beginning with the economy class, they state that since each seat costs about $876, so all the 122 economy class seats would bring in about $106, 872 for the airline company.

Now moving on to the Premium Economy seats, each of them costs about $2,633. So this amount multiplies by 40 seats in total would amount to $105,320! As you can see, the section with approximately 1/3 of the passengers of the economy class brings in almost as much as cash.

But we still have the highest costing tiers ahead of us, so we move on to the business class. The 48 seats each costing $6,723 would bring in a whopping $322, 704!

Now estimating the fare for the 14 first class passengers, which cost $8,715 each and bring in the total of $122, 010! As evident, only 14 first class seats bring in more money than rest 98 of the seats combined. And the three premium cabins, which account for 45% of the total passengers, make up 84% of the flight’s total revenue!

Yeah, that’s why you are served soggy sandwiches in the economy class; you just aren’t profitable enough! More of a necessary baggage the airline company would gladly shed off if they had the option! This is precisely the reason why many airplane companies have been caught red-handed slowly shrinking leg room and rearranging the seating in the economy class to accommodate more valuable customers, i.e. not economy class passengers.

Of course, it has to be said that no airline in the world makes half a million dollars in a single flight, and the rates used in the analysis are probably the highest for a direct flight between two expensive cities. But the ratios remain the same for any other flight and route!

Watch the video below and learn some more awesome facts about the economics of airline classes. And don’t forget to share your flight experiences in particular classes in the comments below!



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