How much does First Class really cost the airline?

17 replies

RaptorNation158

Qantas - Qantas Frequent Flyer

Member since 21 Aug 2014

Total posts 186

How much does First Class really cost?

Sorry I might sound dumb but here is my question:

So with a few glass of wines, some food, and a coffee in the lounge, followed by the service in the air such as the seats, fuel cost per PAX, food, amenity kits, priority lines and stuff, how much does it cost an airline per First Class passenger. I know it also depends on the cost base of the airline but my guess would be under 3000 from somewhere like Melbourne to LA. I am not expecting anyone to know all this but any idea is welcomed. Cheers!

11sjw

Member since 11 Mar 2012

Total posts 159

What it costs the airline to provide all the "bits" associated with a First Class trip (Transfers where applicable, First check in, Lounge useage and the experience onboard) would be of the utmost commercial in confidence.  

What it costs you as the consumer is easy to find.

harrylano Banned

harrylano Banned

Member since 14 Jul 2015

Total posts 11

Hey Rishi, First class from Melbourne to LA is a lot of money for the average person. Your looking at around 8-12 grand.

RaptorNation158

Qantas - Qantas Frequent Flyer

Member since 21 Aug 2014

Total posts 186

Harry, I meant the cost for the airline to cater to that F passenger, yes I know the cost is around 8-12K as you mentioned.

TomGoddardd

Qantas - Qantas Frequent Flyer

Member since 15 Dec 2014

Total posts 191

Look, it really depends if you spend a lot of time at the lounge how much you eat and what wines you select. I would say anywhere between 2-5k.

 

Just a rough guess

Chris Chamberlin

Member since 24 Apr 2012

Total posts 1,093

The exact figures are, of course, confidential, but consider everything that the airline will be paying for along the way from the moment you make your booking:

  • Cost of processing your credit card payment which wouldn't be fully recovered by a fixed credit card fee (for example, Qantas charges a flat $30 credit card fee on international flights, but premium cards along with AMEX and Diners card typically cost businesses between 1.5% and 3% to process, so that's $225 to $450 in fees to receive payment on a $15,000 ticket)
  • Fees paid to the operators of the GDS/booking system used by the airline to secure the booking (Amadeus, Sabre, Worldspan...)
  • IT costs to run the website and to integrate with the government systems (APIS, ESTA check etc)
  • Chauffeur service, if applicable
  • Rent to the airport for taking up more space in the check-in hall for the first class desks and for staffing them
  • Costs of any concierge/'First Host' staff including those that call you before you travel, escort you through the airport and collect your luggage as you arrive
  • Costs of using the Express Path at security and immigration, which costs the airlines a fee
  • Internal costs of general lounge entry plus paying the cost of spa services, your restaurant dining and drinking
  • More rent to the airport for the space taken up by the lounge
  • Paying for the lounge staff who man the desks, conduct your spa treatment or wait on you
  • Paying for chefs and consultants to constantly change the menus in the lounges and on board, for both food and wine
  • Costs of using an additional aerobridge at the airport for first class (such as the Qantas A380 or the Emirates 777)
  • Extra crew for the flight as the ratio of crew to passengers tends to be more generous in first class, and then the cost of their travel allowances, hotels during stopovers, transfers, meals while away, rest periods, entitlements and airport parking at home
  • Extra crew training costs for those who work in first class
  • Licencing costs for the content you watch on the inflight entertainment system
  • The food and wine that is loaded on-board and is usually discarded at the other end - and as first class is usually over-catered to avoid running out, this also adds to the costs
  • Cost of PJs, slippers, amenity kits and cleaning the linens, duvets and pillows used on board
  • Cost of loading extra water where there are showers (and the extra fuel that this added weight burns)
  • 'Future cost' of frequent flyer points when earned in the airline's own program (as these will cost the airline money later when redeeming for something), or an immediate cost if it has to pay another airline to give you those points
  • Future cost of status benefits (a few trips in first class could make you Platinum, which then gets you all that First Lounge goodness when on a cheap economy ticket to Auckland, and costs the airline money when you use partner airline lounges)
  • Cost to the airline from passengers using an Express channel on arrival

... and then you repeat most of that for the journey home! So, you know, it's not cheap...

(And that's also not including other costs of running an airline such as maintenance, parking the aircraft, fixing broken seats and so on...)

TomGoddardd

Qantas - Qantas Frequent Flyer

Member since 15 Dec 2014

Total posts 191

How long did it take you to write that? :)

Chris Chamberlin

Member since 24 Apr 2012

Total posts 1,093

About 10 minutes after seeing the question - thought it was an interesting one!

TomGoddardd

Qantas - Qantas Frequent Flyer

Member since 15 Dec 2014

Total posts 191

yes, it is!

ILIKEPLANES101

Qantas - Qantas Frequent Flyer

Member since 05 Jun 2014

Total posts 87

Don't forget the baggage allowance in first is higher, more weight to carry = more fuel = more $$$.

henrus

Qantas - Qantas Frequent Flyer

Member since 23 Oct 2013

Total posts 768

Chris, It may depend on the airport but in Australia the express pass lane is not charged for as an extra by the airport operator and it is their choice as the the whereabout and if they do operate an express pass line

The airline is given the logos and what to write on the express pass and all they need to do is print it which costs like $0.10 per pass at most

You can have a look at this document to see more about the express pass setup

http://web.archive.org/web/20120317065339/http://www.customs.gov.au/webdata/resources/files/ExpressPathPrinciplesAndGuidelines.pdf

Chris Chamberlin

Member since 24 Apr 2012

Total posts 1,093

Hi henrus,

The document you linked does not state that it is free for airlines, only that the operation of the Express Path must come at no cost to the government itself or its agencies.

henrus

Qantas - Qantas Frequent Flyer

Member since 23 Oct 2013

Total posts 768

Yes and all the airline has to do it print the pass? That what I had heard but if you could prove otherwise that would be great

henrus

Qantas - Qantas Frequent Flyer

Member since 23 Oct 2013

Total posts 768

From what I have been told in Sydney and Melbroune they have staff that man the Express Pass lines who are paid by the airport and that cost is paid for by the airport who pass that fee on the the airline no matter if they use the service or not.

Brsisbane, Perth and other smaller airports just have the security staff maning the line making the cost cheap for the airport operator.

In Australia the only cost the airline has for the express pass is in printing the passes and the other parts are rolled into the local airport taxes.

I kind of assumed that you were talking about Australia only (being on an Australian Business Travelers website) but yes other airline such as in the US do employ staff just to setup the express lines at airports.

Whilst the document was not a great piece of evidence for that the point is it is up to that airport the setup and run the express pass lines and then roll that fee into the pax terminal charges and landing fees but realistically when it happens like that then evetyone is paying for an express pass queue that they may not get to use.

Koru17

Air New Zealand - Airpoints

Member since 04 Sep 2012

Total posts 103

Well I don't believe that business/first costs the airline substantially more than economy.

The fixed costs wont change between classes. And the variable costs won't be much more either. Yes there is better food and beverage but most airlines will have well negotiated contracts with suppliers (for example wine etc).

I think it comes down to two main things:

1. Real Estate. You essentially pay more as the average J seat would take up the space of 2-4 Y seats so therefore the cost is 2-4 times more.

2. Keeping the J/F cabins 'exclusive'. You pay for a cabin with less people and more amenities, if these cabins cost less, they will become more available to the average passenger, hence losing this exclusitivity.

And the main reason is that there ARE people paying (a rather substantial amount of) money to fly J/F; so as long as there is the demand the airline will keep the prices high.

Remember also that the J/F are the most lucrative cabins for  airlines. Which is why they usually come with perks like lounge access etc to entice repeat cusomers.

Of course this is just me speculating, and puting my thoughts in writing :)

I would like to know this, as I feel it would be intersting - but as 11sjw said, it will be the utmost commercial in confidence!

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