That the US airline industry is competitive is well established. Even in a consolidated field, the few fight for every customer. We decided to look at just how hard are they competing. Using several data sources, we built a model. There are two pages to this model.
Page 1: A summary with five tables and a chart. The table from left to right, Net Income, the number of flights, Average number of seats, Flights per day and Net Income per flight. The chart illustrates the Net Income per flight for a year. To drive the model, please select a year. Â
Page 2: We offer you an interactive chart, please click the play button to make it run. Here we show revenue aircraft miles flown (Y-Axis) and Net Income/Departure (X-Axis). A neat feature of this chart is that despite the movement being hard to follow, you can click on any of the balloons to see how it tracked over the period.
From the model, it is clear the margin between profit and loss is tight. In 2018 the DoT reported the average fare was $350. Using that yardstick we can see that for several airlines, they are literally one ticket away from breakeven.  Also, note that Delta has been a leader in Net Income per Flight – no doubt it has managed to do this, in part, via the having lowest fuel prices (owning a refinery helps) and keeping its older fleet in service.
The second-page model shows wild swings and we ascribe this primarily to the swings in fuel costs. Unplanned input shocks play a significant role impacting financials and the model demonstrates this.Â
