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Is it worth it to fly an ultra-low-cost airline?



It's a seven-hour trip across the Atlantic at a bargain price: low-cost Norwegian Airlines will take you from New York to Madrid for $ 154 round trip, including taxes. The fare is not an anomaly in travel American Airlines and Lufthansa are fighting for passenger pennies, offering round-trip tickets between different US cities and Europe for less than $ 400

But how do these airlines make profits on these low prices?
"They are not," says Gerald Cook, an assistant professor at Imperial Riddle Air University. It is an integral part of airline costs and ticketing, which Cook, an executive, and former airline pilot, calls mysterious

"This inexpensive ticket to Europe is not profitable for any airline but adds to the total revenue of the flight," Cook explains
Low prices do not pull their weight
Airfare does not directly depend on the costs of each seat, Cook said. Total flight operation costs include a large fuel bill and the salaries of two or more pilots, highly trained pilots and crew, food and cleaning expenses, and aircraft payments with sticker prices of $ 250 million or more

"Typical flight schedules are determined twice a year, and the actual cost of providing this schedule is almost constant," he says. Fuel prices may change, but this is not something controlled by airlines
Ryanair, the renowned European transport company, boasts that the average wage does not actually cover the cost of transporting a traveler



However, they are very lucrative, where the difference is formed through luggage selection fees, seats and onboard sales - all of which have higher margins than the same seat. Fly the airline as frequently as possible daily so you can charge for these additions frequently; long distance carriers cannot fly in the Atlantic Ocean

"Real variation does not cost, it's income," Cook explains. "The goal of the airline is to increase the revenue of a certain trip on a certain day, based on actual and expected demand


Cook estimates that about 10% of all seats are available as basic economy fare
This means that on a large model plane to Europe, about 30 seats are available at a reduced price. Once these tickets are sold, prices will generally increase as the date of travel approaches
Beware of bargain hunters: "If you try to book an economic seat very close to departure, you may pay ten times the basic economy fare, Cook says. Passengers are advised to book once the travel date has been determined

Lucky math
"If airlines do not offer low wages to entice travelers - if there are significant restrictions - the seats will become unsold and will not generate any revenue, it is better than selling some seats at low prices," he said

Henry Hartfeldt, the founder of the Atmosphere Research Group and an aviation industry expert, says it is not too low, not much. No airline will pay more than it needs, and no vice president will be rewarded for reduced prices

Hartfeldt says the goal of existing airlines is to sell enough basic economy wages to compete with the low-cost competition and also push passengers into higher price categories within the economy, the economy, and business



Airlines use complex software to make dynamic price adjustments based on historical data, competitors' prices, expected and actual sales for a certain category of fare on board, and some internal control

"One software provider analyzes more than a billion sets of fare between London and New York, taking into account the different fare categories, airlines and seats on individual journeys on the road," says Hartfeldt

?Are we in a golden age with low wages

Hartfeldt thinks so. "Fuel prices were reasonable, there is a healthy demand for air travel in the US and Europe and even relatively healthy demand in Latin America and Asia

"Prices are falling as the market has a price-based competitor with a lot of capacity to meet demand," Hartfeldt explains. He notes that when entering the south-west of the market, prices drop, citing the example of its recent entry into the Hawaiian market where some prices are $ 49 from the West Coast. He says Hawaii Airlines and United, its main rivals, "will respond in an organized and disciplined manner

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