Many of you travel by flight, some once a month, some once a year and some once a week, especially those who often travel from one town to another for business trips, have you ever wondered how and how much profit these airlines make? In today’s article, we are going to give you information about this and you will also know how the economy class earns more than the business class, whereas the business class seat is much more expensive than the economy.
The price of an economy class seat for a Delhi to Mumbai flight is usually Rs 5000. But do you know how expensive the world’s most expensive flight ticket is? You might think Rs 500000 or Rs 1000000 but you are still far from the actual price because the world’s most expensive flight ticket is the first class seat of Etihad Airways which is called The Residence. Its price is Rs 5500000. You can call it a hotel room because it hold around 125 squire fit space and in this seat you get a queen size bed, a private bathroom and a sofa to sit on.
This was about the world’s most expensive flight ticket, now can you guess how cheap the world’s cheapest flight ticket can be? The world’s cheapest flight ticket is offered by a European airline Ryanair, a ticket of which costs between Rs 800 to Rs 1500 in India. If we talk about per capita income, the people there have more income due to which their buying power is also more. If you compare it with India, you will have to pay a flight ticket of only Rs 200.
Ryanair and Etihad Airways are opposite to each other. Now who is earning more profit among the two, maybe you will say Etihad Airways but you are wrong in terms of profit Ryanair is far ahead of Etihad Airways. In the year 2022 Etihad made its highest profit of $296 million whereas in the same year Ryanair’s profit was $104 billion.
Revealing Airline Profits: Simple Tips to Grab the Cheapest Flight Deals
In today’s era, there are two types of airlines, one is full service airlines and the other is low cost airlines. In full service airlines, you are given many facilities for free like baggage, quality food and entertainment. Some examples of this are Etihad Airways, Emirates and Singapore Airlines. In Indian flights, Vistara and Air India also come in this category.
On the other hand, there are low cost airlines which give you very cheap tickets but in return they take a lot of facilities from you. This category includes flights like SpiceJet and Indigo. If you look at it from an international level, Ryanair is a perfect example of this.
Cost Cutting Measures by Low Cost Airlines
Low cost airlines often adopt cost cutting techniques which are quite unethical and absurd. If we take the example of Ryanair, their tickets are quite cheap but after buying the ticket, you will have to pay for every small facility like extra baggage, preferred seat and other basic facilities. A statement by the CEO of Ryanair also went viral in which he is seen saying that we want that if a passenger is using the toilet in the flight, then a charge should be made for that as well. Although this idea was never implemented, but it definitely reflects a thought.
All these small fees add up to a huge profit share for these low cost airlines today. This source of income is called ancillary revenue and for most airlines this revenue has been increasing steadily over the years. Apart from this, there is another strategy through which airlines earn profit which is called dynamic pricing. This strategy is used by both low cost and full service airlines.
Dynamic pricing means that the cost of your ticket is not static. Tickets are never sold at a single price. When you book tickets online, the pricing keeps changing. There are many reasons for this, such as the timing of your journey, if you want to travel on Sunday or weekend, or how many people are traveling with you in that flight. The price of the ticket is also set by looking at the demand and supply. What is the price of the ticket of another airline flying on the same route, all these factors work.
Let us understand this game of demand and supply with an example. Suppose a flight has 100 economy seats and it is to fly after 10 days. Now the airline will divide these 100 seats into four parts of 25 each. The first 25 seats will be sold at the cheapest price, the next 25 seats will be sold at a slightly higher price, and the next 25 at a more expensive price. As the demand increases, the price of the ticket will also increase and vice versa, if the demand is low, the price of the third 25 seats will be reduced. If the demand is low, the price will also be low so that maximum number of people can travel by this flight.
Type of Seats in Airlines
There are 4 types of seats in an airline.
| CLASS | LOW COST | FULL SERVICE |
| ECONOMY | AVAILABLE | AVAILABLE |
| PREMIUM ECONOMY | NO | AVAILABLE |
| BUSINESS | NO | AVAILABLE |
| FIRST | NO | AVAILABLE |
How Low Cost Airlines Make More Profits
There are many small reasons for low cost airlines to earn more profit. One of them is that these airlines use the same type of planes. Ryanair and SpiceJet do this very well, which saves their maintenance cost. Pilots also do not have to be trained for different flights. If there are more planes, you will have to keep spare parts for all of them. You should have parts of only one plane.
Many cost-cutting measures are also adopted by these airlines in the flight itself, such as reducing unnecessary weight from the flight, serving only water instead of different beverages, as is done in IndiGo’s short flights. The equipment for adjusting the seats forward and backward is also not installed in these flights, so that fuel can be saved.
Talking about other ways of profit, instead of placing TVs behind the seats, the airline places ads. Apart from this, the advertiser also pays for the ads printed in the magazines that are inside the plane. It has been seen in some airlines that ads are printed on the back of their boarding passes as well, so that more income can be earned.
Talking about another strategy, the more flights a plane takes in a day, the more profit it will earn. These low cost airlines keep the duration of their flights low. The time required between one flight and another is also kept low. In this way, these airlines can operate 5-6 flights in a day.
Strategies to Buy Cheap Flight Tickets
Although there is no specific strategy by which you will get cheap flight tickets because as mentioned above, flight tickets depend on demand and supply, this is its algorithm, but still you can book your ticket at a lower cost by keeping some things in mind, like flight tickets are always expensive during weekends because people often plan business trips and travel on weekends, you can consider Tuesday and Wednesday for cheap flight tickets, on these days the prices are statistically low.
Apart from this, you can check their grid by going to Google Flights. For example, if you have to go from Delhi to Mumbai, then select your date. Google Flights will show you the cheapest flight for this specific date. Apart from this, by enabling some options, Google will notify you when the cheapest flight ticket will be available on your selected date.
In the next strategy, you can consider other airports near you. If you have to go from Mumbai to Delhi and the cost of your ticket is Rs. 10,000, if you go from Mumbai to Jaipur, the same ticket will cost you Rs. 8000. In this case, you will have to calculate the remaining road distance that you will cover, how much it will cost and how much time it will take, whether it justifies the price of your ticket or not.
