July 30, 2012

Start-up airlines never make it at ORH

Fuel is probably the biggest expense to an airline that wants to fly a route say ORH-Florida. Lets just say it will burn 3,000 gallon at 5 or 6 dollars that is 15,000 - 18,000 in fuel alone divided by 150 tickets that is 100 per passenger at $5 per gallon and the plane full...  

Now add in:
  1. Crew
  2. Airport charges on each end
  3. cost of plane
There is no way you can make money unless you are Direct Air and just sell tickets, steal money, don't pay anyone then declare bankruptcy.....   

The only airline that can be profitable is one that is large enough to control their fuel costs at 2.94 per gallon and 3,000 gallon , JetBlue fuel is 9,000.    This in an over simplification, but I hope you get the point. 

9 comments:

jose said...

so how can this be corrected? obviously lower cost of oil/gas is the big one, but besides that, what else? how much on federal and state taxes, fees do airlines pay that gets passed onto the customer in the price of the tickets. what else can massport do to make orh more appealing to smaller/start up airliners? that would allow them to make a profit at orh?

Anonymous said...

Well lets look at it like this. It is approx 1200 miles from Worcester to Florida. Range of a JetBlue A320 is 2700 nautical miles or 3100 statute miles. Meaning they could fuel up in Orlando, fly to ORH and still have enough with reserve to get back to Orlando. Avoiding fueling in Worcester all together.

Bill Randell said...

Anonymous I believe if a plane filled their tanks like you suggest that they have a hard time selling all the tickets because of weight or so I have been told.

It is a real balance act. Planes like to only carry enough fuel to make it one way to optimize ticket sales and freight that they can carry.

Anonymous said...

I believe an airline like a Jet Blue could be profitable @ Worcester. An organization that size would w/ 100% certainty secure their own bulk fuel rates and do their own de-icing (which would be a huge savings). Deicing alone can range anywhere from $1000 to $10,000+ per flight depending on severity of weather @ FBO rates and substantially less if the airline has buys their own deicing fluid and personnel and equipment to apply the fluid.

Add to that the airline has their own personnel for ticket and baggage, and if Massport can work a deal for terminal space, landing fees, and gate fees, I think it could be profitable.

John

Nick said...

John,

Do you think JB would hire their own ground crews and ticket counter people to work at ORH? I can't see them using Swissport or new Reatrix employees.

Jahn said...

Nick I had always assumed the the FBO in Worc had a lock all those kinds of services?? I am assuming they have bid to be the sole provider of such services. I guess my assumptions may be incorrect?

Nick, as far as JB bringing their own people into the fold at ORH i would have to think that they would need more than just 4 flights per week (8 so called airport operations) to justify putting people on a payroll....which people I assume would have to be part time b/c how much work would/could they be doing behind the scenes when no JB flights are in the area?

Sometimes it is less expensive to outsource, although that said with the economy the way it is, JB may have no trouble finding help plus it always presents a better corp. image when your own uniformed personnel are performing the services vs. bringing in subcontractors like the FBO.

Maybe Worc needs an RFBO ordinance. :)

Anonymous said...

I am new to this site but just want to say that I miss the myrtle beach flights and hope someone can get some airline to get them back. I loved direct air and miss the quick easy trips I used to take out of Worcester.
Too bad they were so greedy but maybe just maybe someone else will pick up flying out of there. Crossing my fingers

Anonymous said...

Yes Nick, I absolutely 100% think that Jetblue would use their own employees to operate @ ORH.

An FBO with a veteran staff can sometimes be a savings for an airline, but if Jetblue brings in a veteran staff with a few years of training under their belt, along with proven managers, it usually spells success.

The only roadblock I can see is if Jet Blue doesn't go the vet staff route and cecides to hire new hire trainees locally, then it would make sense to go the veteran well-trained FBO staff route.

John

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