Measure 1: System
Operating Profit/(Loss) per Originating Passenger (Tables 1-3):
In 2007, the network carriers generated a system operating
profit per originating passenger in the first quarter for the first time since
- In 2007,
three network carriers - Northwest, Delta and US Airways -exceeded the profitability per
originating passenger of America West, the most profitable of the low-cost
2007 results reversed the post 9/11 trend when network carriers showed
large losses while low-cost carriers, led by Southwest, consistently reported
a profit per originating passenger. Although their profits continued, the
low-cost carriers have not returned to the profit levels of 2000 and 2001.
with more than $25 of profit per originating passenger topped the network
carriers. American, Delta and US
Airways profit exceeded $10 while Uniteds was just below $10.
West was the leader among low-cost carriers with over $15 profit per
passenger. Spirit, Southwest and AirTran also reported profits. Frontier, JetBlue
and ATA reported operating losses per originating passenger. ATAs loss
per originating passenger was $66.35.
Return to Measure 1
Measure 2: System
Operating Expenses (excluding Regional Jet Contract) per Originating Passenger (Tables
low-cost carriers spent $204 less per passenger than the network airlines
in the first quarter of 2007. That spread per passenger maintained the
cost advantage the low-cost carriers have held over the network carrier
since 2001. The spread has ranged
from $232 to $176.
costs per enplanement for low-cost carriers increased $18 per passenger or
17 percent, mainly due to fuel cost increases and higher wages for a
maturing work force. The network carriers aggressive downsizing in
operations reduced other costs, partially offsetting the rise in fuel
expense and holding the cost increase to $9 per passenger or 3 percent.
had the highest expense per passenger at $459 while Southwest operating
cost per passenger was the lowest at $104.
Return to Measure 2
Measure 3: System
Operating Expenses (excluding Regional Jet Contract) per Aircraft (Tables 7-9):
low cost carriers spent 2.2 million less per aircraft than the network
carriers in the first quarter of 2007, even though their costs rose faster
over the past five years. The network
airlines operating cost per aircraft increased 25 percent over the first quarter
of 2002 to $6.8 million per aircraft. The low-cost airlines costs
increased 28 percent or $1 million more per aircraft compared to 2002. The
higher network costs reflect the larger size of their aircraft.
costs per aircraft rose for all the network carriers. United had the
highest average cost per aircraft in the first quarter of 2007 at $8.0
million. US Airways at $5.6 million
had the lowest aircraft expense in 2007 in the network group. US Airways cost was higher than all but one
of the low-cost airlines expense per aircraft.
the low-cost group, ATA had the highest average cost per aircraft at $6.9
million. ATAs increase of 46 percent from 2002 to 2007 was also the largest
in the low-cost group. AirTran had the lowest overall average
cost per aircraft among the low-cost airlines at $3.9 million per aircraft
but JetBlue, at 10 percent, reported the lowest rate of operating expense
growth per aircraft from the first quarter of 2002 to 2007.
Return to Measure 3
Measure 4 (Tables 10-12):
Passenger Revenue per Originating Passenger (excluding Regional Jet Contract Revenue):
network airlines collected $302 for every originating passenger in the
first quarter of 2007, $181 more than the $121 collected by the low-cost
airlines. The gap grew more than 22
per cent from 2002 as the network airlines increased their international
service which generally produces higher passenger fares.
groups benefited from fare increases that began in mid-2005. Network airlines passenger revenue per
originating passenger rose only 2 percent from 2002 to 2005 but 18 percent
from 2005 to 2007. Low-cost carrier
revenue per passenger rose 13 percent from 2002 to 2005 and 3 percent from
2005 to 2007. The low-cost group
was very aggressive in adding new domestic capacity.
the network carriers, United, at $345, had the most revenue per
originating passenger among the network carriers. Deltas increase of $90 per passenger
from 2002 to 2007 was the largest among the network carriers. Delta is the network carrier with the
greatest increase in international flights. Alaska
reported $200 in revenue per passenger, the lowest of the network group.
best performing low-cost airline was ATA with $383 per originating
passenger. Southwest trailed the
rest of the low-cost group with $101 per passenger. Frontier reported a $33
reduction in its revenue per passenger compared to 2002, the only low-cost
carrier with a loss in revenue. Spirit and JetBlue were essentially flat compared to 2002 with
minimal passenger revenue gains of only $2.
Return to Measure 4
Measure 5 (Tables 13-15):
Full-Time Equivalent Employees (FTEs) per Aircraft:
- The network airlines employed 26 more
FTEs per aircraft than the low-cost airlines in the first quarter of 2007,
the same gap that existed in 2002. FTEs
per aircraft is a measure of operational efficiency.
carriers reduced FTEs per aircraft by 17 percent from 88 FTEs per aircraft
in 2002 to 73 FTEs in 2007.
network carriers reduction was 13 percent and the same 15 fewer FTEs per
industry showed a wide-range of performance, with AirTran reporting 59
FTEs per aircraft, the fewest of any carrier and nearly half the 113 FTEs
reported by United.
- In the
network group, Northwest, Alaska
and US Airways reported the fewest FTEs per aircraft. United, American and Delta reported the
and United reduced FTEs per aircraft by 22 percent, the best improvement in
the network group. Delta and Continental had the least improvement with
decreases of 5 percent.
- In the
low-cost group, AirTran, Spirit and Southwest reported the fewest FTEs per
aircraft. Frontier and America West
reported the most.
led the low-cost group with a 28 percent reduction in FTEs per aircraft
while Frontier and America West lagged the group with increases of 12 and
19 percent respectively.
- FTE calculations count part-time workers as
one-half of a full-time employee.
Return to Measure 5
Measure 6 (Tables
16-18): Average monthly Available Seat-Miles (ASMs) per Full-Time Equivalent
the network carriers and low-cost airlines substantially improved
productivity with more ASMs generated per FTE from 2002 to 2007.
network carriers, with a 41 percent improvement, were still unable to
reduce the 23 million ASMs per FTE gap with the low-cost carriers that
existed in 2002. The low-cost carriers improved 36 percent. But the
low-cost carriers still generated 23 million more ASMs per FTE than the
network carriers in the first quarter of 2007.
network and low-cost airlines increased their average ASMs flown per FTE in
part by flying longer distances with larger aircraft in 2007 than in 2002,
particularly the network group.
generated 306 million monthly ASMs per FTE, the most of any network or
low-cost airline in the first quarter of 2007. ATAs 66 percent increase from
2002 to 2007 was the largest gain for either group.
generated 243 million monthly ASMs per FTE, the most of any network
carrier. United improved 53 percent from 2002 to 2007, the most of any
network carrier. Americans 191
million ASMs per FTE was the fewest among the network airlines.
- Full-time Equivalent Employee
(FTE) calculations count part-time workers as one-half of a full-time
Return to Measure 6
Measure 7 (Tables 19-21):
Average Monthly Revenue Aircraft Minutes per Full-Time Equivalent Employee (FTE)
- The low-cost
carrier group maintained a wide advantage over the network airlines in
average monthly revenue air minutes per FTE. The low-cost group improved its performance
by 63 minutes from the first quarter of 2002 to
2007. As a result, the low-cost carriers raised increased their 2002 advantage
of 54 minutes over the network carriers to 79 minutes in 2007 expanding
the gap by 46 percent.
- The network
carriers improved by 38 revenue airborne minutes per FTE to 159 minutes, a
31 percent increase. The low-cost carriers gained 63 minutes to 238
minutes or nearly four hours per FTE.
led the low-cost group with over four and one-half hours of airborne time
per FTE at 272 minutes. Five
low-cost carriers generated more minutes per FTE than the leading network
leading network carrier was Alaska Airlines which generated 198 minutes of
airborne time per FTE. American lagged the group with 142 minutes per FTE.
calculations count part-time workers as one-half of a full-time employee.
Return to Measure 7
Measure 8 (Tables 22-24):
Average Monthly Originating Passengers per Full-Time Equivalent Employee (FTE)
low-cost carriers still boarded more than twice as many passengers per FTE
than the network group in the first quarter of 2007. Despite improvement
by both the network and low-cost groups from the first quarter of 2002 the
low-cost group boarded 97 more passengers per FTE than the network
carriers compared to 76 more in 2002.
- The network
carriers improved performance by 38 percent from 2002 to 2007 while the low-cost
carriers improved by 32 percent. But the low-cost carriers added 40
passengers per FTE compared to 19 for the network carriers.
2007, the low-cost carriers generated 166 originating passengers per FTE
employee compared to 69 passengers per FTE for the network airlines.
was the low-cost group leader with 229 originating passengers per FTE. ATA
trailed the group with 56 passengers per FTE.
led the network group with 94 originating passengers and United lagged the
network group with 59 passengers per FTE.
- FTE calculations count part-time
workers as one-half of a full-time employee.
Return to Measure 8
Measure 9 (Tables 25-27):
Fuel Cost Per Originating Passenger:
expense per originating passenger rose sharply for both carrier groups in the
first quarter of 2007.
network airlines fuel cost per originating passenger more than doubled from
2002 to 2007, rising to $93 per passenger from $35.
low-cost groups 2007 fuel cost per originating passenger of $38 was less
than half the network cost but it was a sharp increase over the 2002
expense of $16 per passenger.
low-cost group paid $55 less in fuel costs per originating passenger than
the network carriers in 2007. In
2002, the low-cost carriers paid $19 less.
paying $114 per originating passenger, and ATA, paying $131 per passenger,
were the two carriers with fuel expenses of more than $100 per originating
Airlines cost of $62 per passenger was the least of the network group.
- ATA paid
$131 for fuel per originating passenger, the most in both groups. Heavily
fuel-hedged Southwest had the lowest expense of only $30 per passenger.
of the seven low-cost airlines fuel expense per originating passenger was
lower than the least expensive network carriers unit fuel expense.
Return to Measure 9
Measure 10 (Tables 28-30):
Average Full-Time Equivalent Employee (FTE) Compensation Per Originating
network carrier group reduced labor expense per originating passenger by $41
from the first quarter of 2002 to 2007.
financially stronger low-cost carrier groups compensation expenses increased
a modest $3 per originating passenger, reflecting wage increases for the
groups increasingly senior work force partially offset by sustained
- The 2007
low-cost carriers employee compensation per originating passenger was
still $59 less per passenger than that of the network carriers, compared
to $103 less per passenger in 2002.
labor expense per passenger was highest among the network carriers at $124
while US Airways had the lowest labor costs at $71 per passenger. Alaska
was the only network carrier in 2007 with higher labor costs per
originating passenger than in 2002. United reduced labor costs by $65 per originating passenger from
2002 to 2007, the most of any of the carriers.
the network carrier with the lowest labor cost per originating passenger,
paid more than all carriers in the low-cost group excluding ATAs $129 per
at $26 per originating passenger, had the lowest labor expense in the
low-cost group. Spirit, along with
Frontier and AirTran, were the three low-cost carriers that reduced their
labor costs per originating passenger compared to 2002.
Return to Measure 10
Measure 11 (Tables 31-33):
Average Annual Full-Time Equivalent Employee (FTE) Compensation:
- From the
first quarter of 2002 to 2007, low-cost carrier annual compensation costs rose
43 percent. At the same time, network
airline reduced costs by 1 percent through stringent labor cost-cutting
policies in the aftermath of September 11.
- The annual
compensation cost gap between the two groups was reduced to less than $2,000
in 2007 from over $27,000 in 2002.
carrier Southwest Airlines average annual compensation of $98,654 was the
highest of the 14 airlines. In 2002, all the network carriers had
higher average compensation than Southwest.
low-cost carriers, Southwest, ATA and Spirit, had average labor cost
increases of more than $20,000 in the five years. Only network carriers US Airways and
Delta reduced average annual labor costs from 2002.
average annual compensation of $88,646 was the highest of the network
carriers. Delta reported the lowest annual compensation among the network
carriers, which at $72,612.
Southwest had the highest average compensation, the carriers $40 labor
cost per originating passenger was 44 percent less than the $71 per
originating passenger paid by US Airways, the lowest network carrier
(Performance Measure 10).
- FTE calculations count part-time
workers as one-half of a full-time employee.
Return to Measure 11