Dominion301 wrote:enilria wrote:Dominion301 wrote:
Yep CRP’s ties to WN’s early history likely guarantee they’ll never close the station. However, they’ll also likely never grow it to anything more than what it’s been for eons. I can’t ever envision a second route from CRP, not even a seasonal Saturday only route. Don’t people on here say that despite CRP’s poor loads, that cargo is a major contributor to the station’s continued viability?
People always *say* cargo is something amazing, but it's not...ever.
In the last year WN had $19b in passenger revenue and $173m in freight revenue. That's below 1% of passenger revenue. They flew 128m Revenue Ton Miles to get $173m in revenue. So they got on average $1.35 to fly 2000lbs of freight one mile. Doesn't that sound great? So, for say 750 miles they get $1,000 in revenue to carry 2000lbs which is also their average load. One passenger and luggage is about 240lbs, so that's 8.33 passengers in weight for $1000, or a one way fare on the same weight of $120 per pax for 750 miles. Significantly worse than a typical passenger.
CRP had 28000 RTMs last year in and out. At average network yield that's like $40,000. I.E. nothing.
Excellent analysis of the cargo side. I checked CRP's YTD thru April pax stats and WN are up a bit at CRP compared to the past. They're up to a 66% LF. AA are trending downward, while UA are steadily increasing, including the introduction of 1 mainline 73G per day back in mid-April.
Thanks. CRP is flown for unknown, likely political reasons. Could be Texas politics or something tied to a board member or a highly placed WN exec. It obviously has a champion with the power to tell the route planning people to ignore the financial results. Having said that, that's not uncommon at pretty much all large airlines to have protected routes flown for political reasons.
There are three misconceptions repeated over and over again on a.net.
1) The flight is full, so it must be great. (Flights can be full and lose money, particularly in leisure markets or markets with lots of capacity)
2) The flight is empty, but cargo makes the flight work. (There are plenty of cargo airlines. Cargo airline costs are massively lower than pax airlines and that sets the yield bar quite low as airlines must match that or undercut as shippers get better service on freighters. Cargo is *at most* 10% of onboard revenue (and that's with a widebody flying pallets long-haul) for a normally configured passenger plane. That's a nice bonus, but it can't turn bad into good. Up to 10 points of margin is not enough to change a route dramatically.)
This one you hear a lot less...but sometimes...
3) The flight is empty (less than 69% full), but the yields make it work. (Generally revenue management doesn't work until there is enough demand to fill the plane first. The whole concept of revenue management is to turn away traffic that is lower yield than you are willing to carry. If there isn't enough demand to fill the plane then there's nothing to turn away because generally you had to take anybody that wanted to go.)
