Saturday, October 3, 2015

Breakdown Cost of Single Flight Ticket

Ever wondered what consists of your air ticket financially? What are the main elements that airlines take into consideration when they price one ticket? Read below and find :

Here you will find the main elements that adds up to  your air ticket price:

1. Ground handling charges

This is the cost of check-in staff, the luggage handlers and the people who refuel the plane. These staff usually work for an outside agency. These agencies are authorized by IATA. The airlines pay them for taking care of their passengers. Next time when you Check-In, ask him if he works for the airline or not. Chances are they don't.

2. Airport charges 

Airport charge passengers for using their facility. It's mandatory to include these airport charges into passenger tickets. Then they are paid per passenger. 

3. Fuel 

Fuel prices can move sharply - for example, the oil price rose steadily in the build-up to the war in Iraq. There is also a currency risk: airline fuel is bought in dollars, whereas most of passengers are paying in other currencies. Fuel prices affect the ticket price majorly. 

4. Navigation 

Part of this goes to the air-traffic control tower at the airport at each end. The rest goes to the national air-traffic control organisation for the countries that the plane flies over. It is very expensive to setup and run these systems. You pay a small portion to airlines for safely navigating. 

5. Cost of the aircraft 

A medium range aircraft like Boeing 737 cost $70 million, while jumbo jets like A380 cost $300 million. You pay (the cost of the aircraft) divided by [(number of flights per day) multiplied by (number of operating days)]. 

6. Crew salaries and training 

The salaries of the pilots and crew vary from airlines to airlines. On avaerage, the captain earns about $120k a year; the first officer $75-80k; the senior crew member about $25k; and junior crew about $21k each . Airlines can only pay them if they include these charges in your ticket.

6. Administration 

The main items are the lease on the head office, IT costs and the salaries of the management and operational staff. There is also a small element to cover refunds etc. This is the key area where low-cost carriers aim to beat national carriers and its peers by extending the low cost mentality to the head office.

7. Maintenance and servicing 

Safety is a pivotal element of aviation. To be safe, routine maintenance are to be carried out. This cost money,including the cost of owning spare engines and parts.  If you have seen, enough Air Crash Investigation, then you know that careless maintenance will burn entire airline to ground. 

8. Advertising 

Advertising channels for airlines are usually expensive -  mostly newspapers, billboards, bus shelters and the tube. Customer acquisition is fundamental. Who is to pay for all these? Don't worry airlines will add it your ticket price. 

9. Tax 

And then there is Tax, for the government organization to run properly. 

There are other cost like travel agents, credit card charges, bank charges etc. 

So, there it is. Breakdown of your flight ticket.(

Thanks for reading guys. Happy Flight.



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