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How is it possible to sell plane tickets for €9.99? Bulgarian pilot explains

Airlines strive to fill their planes, but not always a full plane necessarily means profit

Aug 6, 2024 06:01 290

How is it possible to sell plane tickets for €9.99? Bulgarian pilot explains  - 1
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Comment of Bulgarian pilot Mario Bakalov* on Facebook:

How much does a plane ticket cost?

It is good to know that the price of a ticket has nothing to do with the costs around the flight. Airline prices are based on what individual customers are willing to pay. Entire departments and computer systems are engaged in the task of calculating, on the basis of a lot of data, when and at what price to offer a seat on a given flight. An important role is played by holidays, vacations, time of day or major sporting events such as the European football championship or the Olympics in France. It gets even more complicated when calculating prices for connecting flights or between airlines. Of course, the goal is always one, to achieve the highest price for a given seat and flight.

Airlines strive to fill their planes, but a full plane does not necessarily mean profit.

Let's look at the costs of roughly 25.000€ on an example flight from Stuttgart to Palma de Mallorca and back with an A320 and 162 passengers, i.e. 90% fill. One third of the costs are related to the transportation of the passengers, so about 50€ per person. Of these, 80% are for taxes and airport fees. Additional costs arise around the weight of the passengers, an average of 3 liters per person per hour (relative to an empty aircraft). In our example, this is another 11 euros.

Regardless of whether there are passengers on board or not, when the plane is in the air it generates costs in the form of take-off and landing fees, for noise and harmful emissions, for maintenance and handling of the plane (ground handling), for security controls at the airport and for kerosene. They are about 45% of operating costs.

In addition to the listed costs, there are also fixed costs, about 23%, which exist even if the plane does not take off at all. These are salaries for staff, technical maintenance of the aircraft, but also capital costs such as interest and depreciation of the aircraft fleet, leasing and insurance. In addition, maintaining an administration also costs money. With these sample costs, the airline only starts making money when the ticket price goes over 160€ on average. This can be achieved with a mix of fares and it is indeed rare for passengers to have paid the same price.

How is it possible to sell tickets for 9.99€?

More and more airlines, especially low-cost airlines, are betting on additional sales outside of tickets and thus manage to finance such prices. These are services such as seat reservation, baggage claim, food and drinks on board and others. Even some of them become practically mandatory for the client. The income from such services of the American low-budget company “Spirit” for example they reach 50%. Additional subsidies for the use of airports in structurally weak regions (small airports in remote areas) supplement the missing ticket revenue.

In general, aviation is a highly competitive and regulated industry with high requirements but rather low margins, the profit per ticket varies between 5 and 8 euros on average.

*Mario Bakalov the most - popular and successful Bulgarian pilots. On 16.10.2016 he landed for the first time the largest passenger plane in the world, the Airbus A-380, in Sofia and thus entered the aviation history of Bulgaria. From the end of 2022, Mario Bakalov flies on an Airbus A-320 and remains the only Bulgarian captain at Lufthansa.

In addition to being a pilot, Mario is a highly valued and respected international speaker, a long-time instructor in the field of human factors and an initiator of various projects in social and business life. Mario is also a well-known face from television, social media and commercials.