Why this NIGHTMARE 800 passenger long-haul low-cost economy plane will never happen

The aviation industry has one of the stranger balance sheets to explore. Unlike other industries, airlines can be incredibly flexible with their costs and somethings don't really cost much at all.

for example, the aircraft themselves are generally leased, not owned, by airlines. Even brand new aircraft that are bought by an airline from say Boeing or Airbus, are then passed onto a leasing firm in what is known as a lease-buyback. This means that airlines can have the advantage of buying a new aircraft - without actually paying for it outright.

Thus most aircraft are leased, and I've made two great videos that explain in too much detail how much they are. But generally, you can expect to get an aircraft for thousands a month.

On the opposite side of the spectrum is fuel. Airlines need fuel to operate, you can't fly without something in the tank and this is a cost that fluctuates daily and changes their bottom line significantly. Thats why we see so many airlines investing in green fuels or other cost-saving measures to keep this as low as possible.

How much do airlines actually make?

According to a report back in 2018, the average profit per customer of a typical New York to Los Angeles flight was around $20 - despite the fact that the ticket was 323 dollars on average.

Of the $323 earned per passenger
$34 is in taxes by various different authorities
$88 is for the crew involved with operating and running the flight.

Then we need to consider fuel. For this particular route back in 2018 and with the fuel price back then, this was $55 for the trip. Now you can see why an airline wants to ensure that their plane is as fuel-efficient as possible, as the fuel cost is more than double the profit per passenger.

Now its time to pay for the plane itself. If a $100 million plane lasts around 25-30 years, then it will cost $4 million per year for the airline. This flight is only one day, so $4 million per day is around 11,000 per day. If the plane carries 187 passengers and is full, then that's around $55 per passenger.

Next, we have the food onboard. if complimentary will cost around $5 per passenger (hence why so many airlines now charge for food). Then we have a smorgasbord of other costs like insurance, advertising, office supplies, commissions, and communications for boarding.

Lastly, the airline also needs to pay the airports to land and use the facilities. This cost greatly depends on the size of the plane, where they want to park it, and how long it's there. That's why we see some low-cost airlines like Ryanair and others park far away from the gate and use buses instead of a jetbridge.

Looking at the opposite end of the spectrum, we have a report from Qantas with its enormously profitable Airbus A380 flight from Sydney to Dallas. A profit of $428 million in revenue per year. That costs to around $628,000 per flight with an average return of $1,598 per passenger. For some passengers, this is more than double what they pay, $660 and a good chunk of the first class price of USD$8,030

Why is this flight so profitable? Its a combination of demand, the aircraft's low cost per seat, and lack of sizeable competition.

The Australian Bureau of Infrastructure, Transport and Regional Economics:
“Airbus A380, the largest passenger jet, costs between $26,000 and $29,000 per hour, using roughly $17,467 of fuel, approximately $40.19 to $44.82 per mile. A more detailed look at Qantas Airways flight offers a better understanding of typical costs. On a 14-hour A380-800 flight from Sydney to Los Angeles, the airline expenditures amount to $305,735; $11,414 in food and drink, $12,625 in staff pay and $37,157 in airport taxes and navigation services, and around $244,539 in fuel to fly the 484 seat plane.

Now we get to the main issue with long haul flights in the low cost market. You might have wondered why doesn't an airline pick up an older Airbus A380 and fit it with as many seats as possible, say 800, and then just operate as cheaply as possible.

Well one airline technically did do this! Norwegian back in 2018 hired an Airbus A380 to transport passengers thanks to the grounding of the Boeing 787 fleet.

The Airbus A380 costs around $150,000 to operate per trip across the Atlantic, which is an average cost of $340 per passenger with 440 seats onboard. At the time Norwegian was charging around 200-341 per passenger, resulting in a profit on their best days of only one dollar.

But what about our idea to fit as many seats onboard as possible? Instead of 440 seats, we have 800 all economy seats. At $26,000 per hour, the minimum price of tickets would need to be $32.50 per passenger per hour to break even, or for New York to London, 187.50 per ticket. This assumes that you can fill 100% of every seat, and not leave a single one empty.

While it's certainly possible for a low-cost carrier to operate a long haul a380, the profit margins are so slim that it would be financial suicide to do so.

[flavoursofsound]

Funny enough an EasyJet A380 wouldn’t concern me. A Ryanair A380 however .... *shudders*

[rodrigonogueiramota]

800 passenger on an A380

Ryanair: only 800? let´s say 1000. on a premium configuration

[ErnestJay]

Simple answer : "It's cheaper to operate 4 Boeing 737 or Airbus A320 than operate single A380 for the same route"

[hellolemons]

I used to work for a billionaire (~25 billion net worth) and in his earlier days as a billionaire, he would fly to certain international hubs in his Challenger 350 to then switch to a commercial flight JUST to save time. He then bought a g650 and an absolutely ridiculously maxed out 777 so he wouldn't have to – But to the point, yes – billionaires are obsessed with saving time.

[bg]

Oh boy my friend, you lost me when you said 4:21 "a profit of $428M in revenue per year"...

[PSYCHOPATHiO]

you forgot to calculate the cargo each airplane carries on its way to its destination, I mean half the airplane is cargo.

[PV]

First he talks about how most airlines lease planes for “thousands a month” but, in his profit calculation he uses ownership of the plane.

[diegocrescente]

We flight attendants do more than just asking PAX to put their tray tables up! 😡😡😡

[luislealsantos]

Even because they are being retired . Would be an "serious emotional event" a 800 people low cost flight.

[KingOfAllAnimals]

Don't forget, all air carriers also engage in light cargo transport if they are within weight limits. Cargo is almost pure profit and even mail carrying is lucrative as added income with passenger flights being so competitive.

[redballthing]

I'm impressed on how quick you produce videos!

[SiriusXAim]

What they should be launching is the £1 flight to New York (With £449.99 booking fee)

[Tonyx]

3:33 "charge for fuel onboard"
to bee seen soon TBH

[SalemAdams]

You forgot to mention Pratt & Whitney, who make airplane engines. They are a pretty large engine company.

[donlaight]

Reading in the UK news on Saturday, I think, Easy Jet reported their first financial loss this year. Food for thought.

[teribasi]

Therapyst : Easy Jet A380 is not real, it can't hurt you
The thumbnail : *Easy Jet A380

[jonntischnabel]

Tickets are way more expensive in the USA than Europe. I flew Stansted to Biarritz return for £10 once, and Manchester to Oslo for £40 return. Luton to posnan was £35 etc.

[VEVOJavier]

Ah yesss... The islands of Bali, Thailand, Vietnam, and China

[craigmathews]

think there have been very successful long haul low cost carriers already. Canada 3000 for example. It died because of SEP 11, but was making good money apparently before then. There's also Air Transat in Canada (still operating) & Cebu Pacific(Philippines)

[teomartini]

1:40 it is sad that we invest in green fuels only for savings