People usually have misconceptions regarding factors contributing to airfare prices.
First thing comes into mind is the fuel price and consumption. Contrary to popular belief, it isn’t the only factor contributing to airfare prices.
In this entry we’ll take a deeper look into the factors and surprising reasons on how budget airlines can still sell it at a cheaper price.
Let’s jump into it!
Air Crew Members
The commercial plane can’t operate without it’s respective pilots and flight attendants.
And let’s be honest, they don’t provide their service for free. Salary is based on flight hours, the longer the miles the higher compensation.
Airline companies (specially low cost carriers) don’t make a lot of profit, a matter of fact many of them go broke then turn bankrupt.
In the United States, airlines would only make a profit up to $17.50 per passenger, just for a one-way flight regardless the size of the airlines.
According to the International Air Transport Association (IATA), the profit of $17.50 is roughly double of what other airlines around the world makes per passenger.
Therefore the cost of airfare is usually high because of the accumulation of prices from other factors and not profits.
Landing fee is paid by an aircraft to an airport company for landing at a particular airport.
This fee is charged basically for using the airport gates, porters, maintenance and other resources. In some airports landing fees is also used to expand the terminal.
However that isn’t all an airport will charge to airlines, there is also cost for parking the aircraft and temporary parking space between one flight to another. There’s also the cost of refueling an airplane, well, it depends if the airplane needs it or not.
That is why your destination may influence the airfare. Landing fees can vary greatly between airports, with congested airports with the most landing slots, are able to charge at a higher price.
The busier an airport, the more expensive it gets for an airline to land at.
This factor is not even surprising, did you know that there are different type of taxes for aviation?
Let us take USA as an example. There will be a normal tax on a single ticket, then this will go to Federal Aviation Administration, the amount depends on whether it is an international or domestic flight.
Another type of tax is what the passenger will pay (Customs User Fees). Taxes vary from one country to another, some countries may charge you more than another.
There’s a security fee implemented to help finance the increasing cost of securing the aviation transportation system.
The revenue generated from this fee is used to help ensure safe and efficient flow of people and commerce. However not all airlines have this fees charged to their passengers.
We all know that the price of a commercial airplane is very expensive.
Believe it or not, the price range of one commercial airplane is from $32,200,000 to $436,900,000 depending on the size and model. And for an airplane like the ATR 72, the price can be as low as $14,000,000 per airplane.
That is still pretty expensive.
The service life of an aircraft is determined by flight cycle not flight time, one flight cycle means one flight.
Why it depends on flight cycle and not flight time? It is because it depends on how many times an airplane is pressurized.
This activity stretches the cabin every time, and of course there is a limit to how much stretching an airplane can go through.
But, do not worry, after a certain amount for flight cycle, companies are required to retire the current service planes and invest in new airplanes.
That is why the longer distance airplane, which does not fly often, looks older than the airplane which have shorter distance of flights, multiple flights daily.
Just like cars, airplanes need maintenance too. Airline companies will need to pay for the labor cost, parts, engine restoration and inspections.
There is a payment that airline(s) needs to pay for, which is the certificate fees.
The certificate is issued to indicate the air worthiness of an aircraft based on the manufacturing design or type.
Did you know that one of the indication that an aircraft is airworthy is its color (must be white, in most cases).
Navigation charges – Charge per Kilometers
The Navigation charges in easier term is “overflight charge” – what airlines have to pay when their aircraft aircraft through an FIR of some country.
What is FIR? FIR for long is Flight Information Region. It is a specified region of airspace in which a country can charge a fee if an airplane goes through their airfield.
So… Is the division of authorities given to only one country? No, of course not. The division among authorities is done by international agreement through the International Civil Aviation Organization (ICAO).
The charges varied from one country to another. But ALL countries have a navigation charges for airliners.
Non-flying related factors
This has to be included as well… Why you ask? Well this factor include the administrator, software engineers, customer service, public relation agents, marketers, janitors, utilities, travel cost and many more. It also includes insurance for airplanes and passengers. Last but not least, the factors also cover hotel costs for crew members and other staff members traveling for work purposes.
Next time you purchase your flight ticket, you’ll be aware why flying is more expensive than riding a bus.
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