How Expensive Is It For Southwest Airlines To Operate A Flight?

Have you ever wondered what it costs a big airline to operate a typical flight? For instance for a flight from New York to Los Angeles, how much would Southwest Airlines ( LUV ) spend on its crew, fuel, and other cost items? This note brings you our interactive dashboard that combines our in-house data analysis with our proprietary technology to give you the flexibility to understand how different cost buckets vary with flight length, aircraft sizes, and average jet fuel price for Southwest. Our interactive dashboard can help you answers questions such as how costs, and consequently ticket prices, may vary according to routes and flight capacity, and how an increase in fuel price may impact Southwest Airlines' flight operating expense.

Our base case shows a typical flight of 160 seat capacity covering nearly 2500 miles between New York and Los Angeles. Based on the figures reported by Bureau of Transportation Statistics and Southwest Airlines' own financial metrics, we estimate that it will cost the company nearly $37,000 to operate one such flight. You can modify the inputs such as Air Miles, Number of Seats, Flight Hours, Fuel Price etc. to estimate flight operating cost for Southwest Airlines for any route and for a plane of any size. While from year to year, fuel cost has the most variability, it accounted for nearly 22.3% of flight operating expense in 2017. However, employees continue to remain the biggest cost component for Southwest, accounting for nearly 41.4% of flight operating expense. You can go to our interactive dashboard to see how different cost components can vary for different flight routes. For instance, while fuel cost is directly proportional to flight capacity, duration and length, we estimate that maintenance and repair cost mostly depends on flight size and number of hours flown.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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