As ticket prices rebound higher and faster than expected, exactly where does the money go. What does it cost airlines to get you to Hawaii, and how do those costs break down?
We all want a great deal on an airline ticket to Hawaii. And while a rock-bottom fare like $119 from the West Coast sounds great to us, it doesn’t begin to cover the costs for the airline. For example, we estimate the cost of fuel on your flight to Hawaii is now running at about $89 each way. And that’s just for starters, as you’ll read below.
The U.S. DOT said last month that the cost of jet fuel is up, way up at all-time highs. Given what we just shared about Costco’s Gas for cars, this doesn’t come as a big surprise. But it got us thinking again about airline tickets to Hawaii and where the money goes.
While airline costs, ticket pricing, and such are complex and largely beyond the scope of this article, we wanted to dive into the cost of an airline ticket to Hawaii a bit to see more about how these costs break down.
These two airline expenses comprise about 50% of airlines’ costs.
1. Fuel. According to IATA, the cost of jet fuel ended last week at $3.76 a gallon. And USAToday said that a typical 737 aircraft uses 750 gallons per hour. With a flight to Hawaii averaging 5.5 hours, the math yields a cost of $15,510. Based on an approximation of 175 seats per plane, that comes down to a fuel cost of $89 per person, each way.
2. Personnel. It’s estimated that airline staff accounts for about ⅓ of total airline expenses.
And then there are the other airline costs you may not have thought about.
1. Planes. This includes purchase or leasing, depreciation, and other costs. Airlines are constantly renewing their fleets, for the sake of economy, and reliability, among other reasons, as well as because consumers largely prefer younger fleets. Aircraft costs are a significant component of airline expenses.
Boeing 737 Max 8 $121 million.
Airbus A321 $115 million.
Boeing 777 $275 million.
Airbus A330 $240 million.
Boeing 787 $250-$300 million.
2. Aircraft maintenance.
3. Insurance.
4. Reservation systems and distribution costs.
5. Non-fuel flight costs including catering, supplies, etc.
6. Landing fees. Airlines pay a landing fee to use airports. Fees vary by airport, as well as by aircraft and other factors. An average fee may be $5,000 per flight.
7. Ground handling fees. These can include government and airport fees as well as for companies that provide airline ground service. We’d estimate $1,000 or more per flight for these costs.
So why does an airline offer Hawaii tickets where a profit cannot be made by them?
They want to continue to keep you flying, to stake their claim on a route. They hope too, that the ancillary fees you pay (baggage, for example) will help out. We all benefit from those lower fares, and Beat of Hawaii remains on the flight path to great deals for you.
Since we know there are a lot of airline folk reading here, we’d appreciate any input on the costs we indicated. Mahalo.
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Mahalo for this analysis, BOH. I would submit the average flyer has no idea what the costs are for an airline to operate, just as they don’t comprehend that weather in one part of the country can affect the entire network schedule and take it as a personal afront when their flight is delayed or canceled.
Hi Ed.
Thanks! We appreciate your input on this and so many other articles.
Aloha.
Did you know that Aramco profits are up 81% this year. If you are looking where the money is going this year, It’s big oil.
Aloha Guys