It would be nice to see an analysis of a median passenger, how much they pay in flights, how much they pay in foregone rewards from a non-airline card, etc. Or a revenue analysis—valuation is very subject to accounting trickery regarding debt management and liability assignment choices.
Claude says 75-80% of airline revenue is ticket sales, 8-10% add-on fees, and 10-12% credit card loyalty programs.
This is the problem with financial attribution. Net is highly susceptible to that accounting trickery (aka structure decisions) regarding how expenses are distributed. In truth, all of these are correlated in customer behavior—the credit card revenue comes because of operational/flight options. How much of the expense should be attributed to each (and how much of the debt service for the enterprise, which is significant for airlines) is a choice they make.
They are tied together enough that there IS NO objective truth of the matter for what the post is claiming. Revenue gives the closest approximation IMO, but really, it’s everything combined with everything else.
It would be nice to see an analysis of a median passenger, how much they pay in flights, how much they pay in foregone rewards from a non-airline card, etc. Or a revenue analysis—valuation is very subject to accounting trickery regarding debt management and liability assignment choices.
Claude says 75-80% of airline revenue is ticket sales, 8-10% add-on fees, and 10-12% credit card loyalty programs.
That seems plausible for gross revenue, not so much for net.
This is the problem with financial attribution. Net is highly susceptible to that accounting trickery (aka structure decisions) regarding how expenses are distributed. In truth, all of these are correlated in customer behavior—the credit card revenue comes because of operational/flight options. How much of the expense should be attributed to each (and how much of the debt service for the enterprise, which is significant for airlines) is a choice they make.
They are tied together enough that there IS NO objective truth of the matter for what the post is claiming. Revenue gives the closest approximation IMO, but really, it’s everything combined with everything else.
See also: Hollywood accounting.