UK Airline Profits Revealed
We’ve all been in that situation when you go to book a flight and stare in disbelief at the cost. How much?! You wonder why some tickets are under £20 and others are creeping into the hundreds of pounds for the same flight route. You also probably presume that the airline’s CEO and investors are rolling around in your cash (not an image we particularly want of Michael O’Leary or Doug Parker) and laughing at just how much money they were able to squeeze out of your wallet.
Well, how about if we told you that a quick Google search can show you how much airlines make from your seat? They have to provide annual reports outlining their profits which are pretty accessible, if you know where to look. You might not be interested in the cash flows for airlines (we don’t blame you, it’s a pretty niche interest), but when you look at how much profit they make on the average seat, it makes you wonder why you’re paying so much for one ticket.
The Maths Bit
EasyJet’s Profit From Your Ticket
The results from the six months between 30 September 2017 and 31 March 2018 show that 36.8 million passengers flew with easyJet. The revenue per seat is £54.10 whereas the cost per seat is £43.11. Cost per seat is basically how much the airline has to factor in when selling their tickets, and it can be affected by everything from fuel prices to inflation. Of course, the actual number will vary from seat to seat so don’t take this as exactly what they get from your specific flight.
On average, easyJet makes £10.99 for every ticket they sell.
Flybe’s Profit From Your Ticket
A quick glance at Flybe’s report shows that they seem to be making a loss on flight seats alone – and that’s no surprise considering their recent profit warning, forecasting between £5 million and £10 million for the first half of the 2017/18 financial year. What this means for you and your seat on the plane is that they aren’t making any money at their current prices. Passenger revenue per seat is £53.79, which is about the same as easyJet, but it costs them £59.69 per seat. That’s an extra £16.58 spent per passenger.
Flybe makes an average loss of £5.90 everytime someone flies with them.
UPDATE: Flybe announced that they were up for sale on 14 November due to the projected ten million pounds loss in profits. The Independent calculated that they will lose seven thousand pounds an hour between November and April.
Jet2’s Profit From Your Ticket
Jet2 reported that the average fare a Jet2 passenger pays is £73.95. They flew 10.38 million passengers during the 2017/2018 financial year, and earned a Group operating profit of £130 million. Bear two things in mind: 1) this includes package holidays, and 2) the company and its parent group, Dart Group, aren’t transparent about any of the direct costs.
In theory, Jet2 earns £13 per seat.
Ryanair’s Profit From Your Ticket
Over 130 million people are predicted to fly with Ryanair this year, so their average fare is much lower than other airlines at €39.40 which is about £35.95. Their forecasted profit is £1.06 billion so these numbers are only estimates.
Ryanair should make £8.15 for every seat that’s sold and used.
What does this mean?
That’s a valid question. When the news announces headlines like ‘£1.06 billion profit’ or ‘shares mauled as losses spiral’, it’s easy to get swept up in the outrage. How is Ryanair making so much money when they’re offering flights for less than a tenner? How come Flybe flights are so expensive and they’re making a loss? There are lots of business-based and technical answers to these questions but they don’t really explain it in a way that most customers will understand.
Well, the number of aircraft and subsequently the number of flights will obviously impact an airline. Less flights = less passengers = less money. Flybe is very small compared to easyJet and Ryanair, but the cost it takes to maintain and run their planes is about the same. Hence the smaller profit margin. This is partly what caused airlines like Primera Air and Monarch to collapse earlier this year.
Why should I care?
That’s a valid question. What does it matter to you if an airline earns X amount, as long as you can travel to and from the places you want to? Well, there are two things that are directly related to you, the traveller:
- Higher prices
When smaller airlines go bankrupt, the bigger ones are one step closer to gaining monopoly of the market – that’s when they stop caring about offering the super cheap flights and can charge what they like because they are the only airline available. This is a worst case scenario, though, so don’t take this as a prediction that Ryanair is going to take over the industry (let’s hope not).
- Fair profits
When someone has to cancel a non-refundable flight, airlines are allowed to resell their seats, meaning they make double the profit. With the likes of Ryanair claiming to have a 95% load rate (how many seats they fill), but at least 25% of people saying they’ve had to cancel their flights, then all you need to do is add two and two together. Instead of making a brand new booking, you can buy second-hand flight tickets through TranferTravel.com and make sure that the profits these big airlines earn are fair. Plus, it feels pretty good to know you’ve helped someone who’s stuck with an airline ticket.
You can be more selective and well-informed when it comes to deciding the value of your flight. For instance, is a £100 one-way ticket from London to Rome too expensive when it comes to using the bigger airlines, particularly if you know how much profit they’ll get from an overpriced seat? Is there another airline you can fly with, or even better, can you buy someone else’s flight?
The Bottom Line
All in all, how much an airline profits from your ticket doesn’t matter too much. However, next time you baulk at the price of a flight, make sure to head to TransferTravel.com to find a cheaper deal whilst also helping out another traveller!
Head over to our dedicated travel marketplace and find your next flight now.