Business Report: How money flows at an airline

Business Report: How money flows at an airline

HONOLULU (HawaiiNewsNow) - Using spring results, just out from Hawaiian Airlines, let look at how an airline works. Hawaiian spring revenue was more than $700 million. More than nine tenths of that came from passenger revenue, ticket sales and fees. The rest was revenue in the cargo division and performing local services for other carriers. Operating expenses topped $622 million. I don't have enough colors to show everything but here are some of the major cost items. More than half of cost is two things.

First, $172 million for wages and benefits. And almost as much, $153 million, for jet fuel. Next biggest item: $39 million for maintenance, including the price of parts. Several other items come close to $30 million, above or below, including passenger servicing, writing down the value of planes as they age, aircraft rent, landing fees, and other stuff.

This tells you a couple things. First, for every seven dollars Hawaiian makes, it takes six dollars to cover its costs.  Second, if you can't raise fares and jet fuel goes up, you can manage, if you find small savings in each and every one of these other areas.

Copyright 2018. Hawaii News Now. All Rights Reserved.