Does Filling up a Plane make the Airline Money?

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I recently flew Southwest from Baltimore to LaGuardia to meet up with a few friends in Queens, NY (the little less than the $100 for a one-way fare was cheaper, and the 40-minute flight faster than the Acela). The flight was barely half full. I was convinced Southwest was losing money on this flight especially with the cabin seemingly full of tourists likely paying “web only” $100 fares like myself. Really? What my research uncovered surprised me. How much does it cost the world’s major airlines to fly a passenger a mile? How much money do they make from that passenger? How full are their planes? Read on…

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How Much is a Frequent Flyer Worth?

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I recently watched “Up in the Air” and could not help but marvel at Ryan Bingham’s (George Clooney’s character) perks as an elite frequent flyer on American Airlines. Out come the Champagne and a visit from the airline’s chief pilot on crossing 10 million miles. While Hollywood has taken its usual liberties with Ryan Bingham, airlines do coddle their most frequent flyers. Dedicated phone numbers, private check-ins, and birthday cakes on the road are all part of the package; in addition to the usual upgrades, lounge access, and priority boarding. Made me wonder why the airlines go through the trouble – its a few passengers after all. It is really worth, for example, holding a 747 an hour for a Bingham-like passenger to make the connection? What is a frequent flyer loyalty worth to an airline?

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