Passenger load factor

fr336

Is there an average load factor that has to be hit before an airline won't run a flight, either generally or on a one off? In terms of the one off what I mean is if you had an averagely popular route and then one day the numbers simply aren't there at all - how low does it have to go before the flight's cancelled for those who have chosen to travel on it, if at all?

Really I'm just trying to find out the typically lowest number a flight will fly with and on average how many people are in the skies across every day.

Thanks

Jack1985

In my experience LF comes second to yield, if the route makes money through yields but has a low LF say below 60% there's no reason the airline would pull it unless they could operate a route in the same time frame where the yields can be higher if the route is predicted to carry a higher average load factor.

And example of an airline who got yield and LF matching just right would be easyJet, undoubtedly they operate some of the most lucrative routes pan-Europe. An example I can give you, Aer Lingus Cork to Prague in 2008 - They were achieving a LF of above 80%, the route had shocking yields though and they eventually pulled it.

fr336

Many thanks Jack - would you have any idea what would be the lowest load factor the London-Dublin route would ever get to? LTN-DUB especially

I guess generally the airlines don't release specific info for commercial reasons?

Jack1985

fr336 wrote: »

Many thanks Jack - would you have any idea what would be the lowest load factor the London-Dublin route would ever get to? LTN-DUB especially

I guess generally the airlines don't release specific info for commercial reasons?

I wouldn't have access to specific figures, you are right airlines for commercially sensitive reasons don't release that data (for particular routes) - You can however if you have time log onto the cso website and have a look at passenger statistics travelling between DUB-LTN-DUB - A solution to find the LF you are looking for is to find out the exact number of flights operated that month so for example on the Luton run's its 3 daily so 6 sectors a day multiplied by the amount of days in the month you are looking at, divide that into the amount of passengers the CSO are telling you travelled between both airports in the given month and multiply the figure you get by 100/1 (That should be the formula long time since I used it).

Airlines like easyJet and Ryanair are really yield driven so all of the routes really are profitable the LF could be low on particular routes but its more than likely making money, then you have the legacies in Europe who in some cases operate short-haul routes at a loss per flight just to feed their long-haul networks. And in the above case the LF could be high, but yields terrible.

Jack1985

Forget the formula I gave you, you can tell its been a while since I used it hahaha - This is the formula:

ASK = No. of seats/aircraft * No. of aircraft * aggregate distance flown
RSK = Total Number of Passengers * Distance Flown

Load Factor = Revenue Seat Kilometers / Available Seat Kilometers

Available seat kilometers is a measure of the production of an airline and the Revenue Seat Kilometers is a measure of how much of that production was consumption.

Simple example: -

Route: - ABC -> XYZ
Distance = 200km
Aircraft = 2
Seats / Aircraft = 50
Total Services per day = 8

Available seat kilometers = 200 * 2 * 50 * 8 = 160000 km

Assume on day 1 there were a total of 560 passengers travelling.

Revenue Seat Kilometers = 560 * 200 = 112000 km

Load Factor = 112000/160000 = 0.7 or 70%

fr336

Awesome thank you Jack!!

Jack1985

And for simpler calculations this is what I used (based on CSO Feb 14 stats):

Aircraft Certified Seats: 189 (FR)
Sectors Per day: 6
Days in Feb 14: 28

= 31,752 available seats **Certified**

CSO DATA

23,869 travelled between DUB-LTN-DUB in Feb 2014, there were no cancellations in this period.

LOAD FACTOR

23,869/31,752 = LF 75%


*Just be advised if you find you are getting an actual travelling passenger amount higher than the capacity you calculated on the route this is more than likely down to more than 189 passengers travelling on the particular flight (as can happen with travelling infants and staff), if its below the calculated capacity well then you're LF will be fairly sound.

fr336

Crazy numbers, such an interesting industry!

Jack1985

fr336 wrote: »

Crazy numbers, such an interesting industry!

Pity now (for the brain!) that computers do all the number crunching these days, airlines can at the click of the button have live data on particular routes with LF's per flight and yield data etc - That's the premise than for route cancellations and/or increased flights. I'd go as far to say the systems they use now can literally make or break airline revenue performance and its not unknown to hear an airline shut sales on a route they expected to launch in a few months within weeks due to the sale performance following the actual announcement!

But yes its a serious numbers game, love the financial/stat side of aviation

fr336

Your maths is better than mine (that wouldn't be hard admittedly)

Yes old FR are ruthless as ever when it comes to pulling routes aren't they...doubt LTN-DUB will ever see that day though

Jack1985

Ha! My Maths was never a strong point either, I should say too on the likes of the Domestics (IE-UK) the base fare you pay can in most cases cover the cost of you on that seat without the need for you to give additional yield that you more than likely already did through the likes of speedy boarding etc to cover the actual seat base cost, its the longer routes where basically its all yield-driven with on-board sales and the lot.

I wouldn't be concerned about LTN-DUB, sure wasn't that one of FR's first routes? I'd say they clean up on it!

fr336

Jack1985 wrote: »

Ha! My Maths was never a strong point either, I should say too on the likes of the Domestics (IE-UK) the base fare you pay can in most cases cover the cost of you on that seat without the need for you to give additional yield that you more than likely already did through the likes of speedy boarding etc to cover the actual seat base cost, its the longer routes where basically its all yield-driven with on-board sales and the lot.

I wouldn't be concerned about LTN-DUB, sure wasn't that one of FR's first routes? I'd say they clean up on it!

Ah interesting

Yes it was - according to wiki their second ever route. However the first was apparently Waterford-Gatwick; I was under the impression it was Waterford/Luton - Wiki error? I've read books on FR before on it but I could be just remembering incorrectly too.
I think London-Dub is the busiest international route in the world right now? (Though I guess LHR Lingus and STN Ryanair are the main ones for that)

ETA: Damn, FR website confirms the Waterford-Gatwick thing.

fr336

And FR have been going as long as you Jack!

Jack1985

Yep 30 years to me and Ryanair next year!!

fr336

Jack1985 wrote: »

Yep 30 years to me and Ryanair next year!!

Ah life only begins at 30...especially if you have the Ryanair kind of attitude

arubex

As Jack1985 noted, airlines don't consider load-factor as a primary performance metric but as an indicator of pricing power.

On some turboprops the break-even used to be as low as 40% which gave the airline massive flexibility in pricing; if they could hit that threshold selling juicy business-market fares and then use the remaining seats to sweep-up tourist-market at low ticket prices, making essentially free money with each subseequent seat sold.

Another factor to consider is that if an airline is consistently running a load factor > 90% or so then they consider that inefficient, since it prevents them accommodating lucrative spikes in last-minute traffic.

Somewhere between 60 to 80% load-factor would seem normal. If a particular flight is starting to creep above that range then the pricing will rise again to milk the demand.

fr336

Very interesting, many thanks arubex - and good morning!

martinsvi

Some airlines do publish their load factors if they are looking for investors. Easyjet is known to cancel a route if the LF dips below 75%

Phil_Lives

If Ryanair ever decide to purchase smaller planes to run alongside the 737 they're going to have historical data for many dozens of routes which are strong enough to sustain a smaller plane but not enough to fill a 737.
At the moment all they can purchase are smaller jets which are almost as expensive to run as a 737 or drop down to ATR72 or Bombardier turboprops which only make pocket money profits for them.