Revealed: What airlines really spend your money on

How much profit do airlines really make on each flight? And is fuel really the biggest cost of air travel? Wonder no more: a new video has revealed the true cost of flying, accounting for everything from airport fees to crew salaries. And those profit margins are smaller than you might think.

“Why Flying is So Expensive”, the mini documentary by Wendover Productions, breaks down the costs of a flight from New York to Washington – a 1 hour 20 minute trip, equivalent to flying from Birmingham to Paris, or London to Edinburgh.

According to the video, the average fare for this route costs US$80 (£55.20), but the airline will only make a profit of $10 (£6.90) – at most.

Using statistics from the US Transportation Security Administration (TSA), Airbus and Delta Airlines, Wendover Productions calculated the costs based on an Airbus A320 travelling at full capacity (154 passengers), one-way between John F. Kennedy International Airport and Washington Dulles International Airport.

Although the figures are calculated using US costs, they could be applied to air travel anywhere else in the world, with a few adjustments to account for varying taxes and charges. The table below shows the video’s break-down of what your airfare is really spent on.

“There is so much more that goes into your ticket price than fuel,” declares the narrator. “Aeroplanes are expensive. An Airbus A320neo – a typical short-haul airframe – costs $107million (£73.8million), and “can make up to 60,000 flights in its lifetime. Based on that, $1,783 (£1,231) of every flight it makes must be devoted to paying off the initial price of the plane.” Per person, based on a capacity of 154, this equates to $11.50 (£7.93) of your airfare.

Crew salaries are also taken into account. “A US pilot makes on average around $79,000 (£54,557) per year, which works out to $44 (£30) per flight hour." By law, every commercial plane must have at least two pilots on board. 

For an average short-haul flight, an airline pays whopping $2,121 (£1,464) in maintenance fees. According to the video this equates to $646 (£446) labour, $276 (£190) parts, $596 (£411) engine restoration, and $603 (£416) on inspections and component overhauls. For every ticket, $14 (£9.66) is attributed to these costs.

Taxes and charges accounted for the biggest proportion of the ticket price: $15.60 (£10.77). This includes the landing fee (a charge that every airline must pay the destination airport), 7.5% Domestic Passenger Ticket Tax, $4 (£2.76) Domestic Flight Segment Tax, and $5.60 (£3.90) 9/11 Security Fee – which covers the cost of increased airport security after the 2001 terrorist attacks.

The video also reveals  why international flights are often much more expensive than domestic departures. If the flight was travelling across borders, passengers would have to pay for US Customs ($5.50/£3.79), Animal and Plant Health Inspection ($5/£3.45), and International Transportation Tax ($17.70/£12.20). In the UK, Air Passenger Duty (APD) is charged to any travellers flying on an aircraft that weighs over ten tonnes or can carry more than 20 passengers – costing up to £73 per person flying long-haul. 

“We also have to consider the non-flying part of flying,” explains the narrator. “Airlines need to pay administrators, executives, software engineers, marketers, consultants, customer service personnel, public relations agents, janitors, along with rent, benefits, travel costs, utilities and more. It’s hard to put an exact number of how much per person this works out to, but we’ll put a conservative estimate of $10 (£6.90).” That figure seems a little too conservative, however: if $1.50 of every ticket accounts for the salaries of six staff on board (two pilots and four cabin crew), surely a much larger amount would be needed to prop up the entire running of the airline?

Nonetheless, the cost of taxes, charges, maintenance and all those other little fees comes to $68.75 (£47.46). Although, “We’ll round this up to $70,” says the narrator, “because there are various small things I didn’t cover such as hotel costs for crew members, plane storage, APU rental, liability insurance, et cetera.” That comes to £48.32 – no small amount, considering the average ticket price is £55.22.

Wendover Productions admits that the figures are “rough estimates”, and are open to interpretation. “Many of these prices will vary widely over time, and there are certainly ways that airlines reduce these costs.”

But despite all of the levies and taxes, flying is, in fact, getting cheaper. “In the past 30 years, the average inflation-adjusted airfare has dropped by 50%, and it is still dropping,” explains the video. “One of the reasons for the drop in prices is the rise of efficient aeroplanes. Certain innovations, such as composite construction, better aerodynamics, more efficient engines, and winglets have actually driven down the cost of flying.”