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The Economics of Airline Class

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This is a Wendover Productions Video made possible by Squarespace--Make your next move

with a beautiful website from Squarespace. This video is a bit of a continuation to my

last one--Why Planes Don’t Fly Faster. I ended up talking a lot about the Concorde--the

supersonic plane--but part of the story was left untold. Even though the Concorde failed,

even though it wasn’t commercially viable, it still had a profound effect on how we fly

today. Let me explain... Economy class is not how airlines make money.

The real money, at least for the traditional airlines, is in premium cabins. Let’s take,

for example, this British Airways 777. There are 224 total seats on this plane and it flies

daily between London Heathrow and Washington Dulles airport. A roundtrip economy class

ticket leaving March 15th and returning on March 22nd costs, at the time of writing,

$876. That means that, if each one of the 122 economy class seats is filled, the entire

back section of the plane will make the airline, round-trip, $106,872. Meanwhile, the going

rate for one of their premium-economy seats is $2,633 round-trip meaning the entire cabin

will make $105,320. Already you can see that the entire 40 seat premium-economy section

makes British Airways roughly as much as the entire economy-class section. Going up to

Business Class, there are 48 seats sold each for $6,723 making the airline $322,704. The

14 first class seats are sold for $8,715 each or $122,010 total. So, once again, the 14

passengers at the front of the plane make the airline more money than the 122 at the

back of the plane. In total, the three premium cabins--premium economy, business, and first--make

the airline on this flight $550,034. That means that 45% of the passengers account for

84% of the airline’s revenue! Now, I need to add some caveats. There is


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