Thursday, February 25, 2010

Traffic Check

Time for a capacity check - if I'm counting right, we will have six mainline and six regional planes departing every day, about 1140 seats per day. Last year Delta sold 423 hi-fare seats out of 600 per day offered. The fares look to be 30-40% less, so what will the sales be? Each airline needs to sell about 75% to break even, or 855 total. (SW can actually sell only 40% and get 35% reimbursed from St Joe). Its an interesting problem for both - no volume increase (423 of 1140) is 37%, obviously too low, but what is a realistic number? I would guess 50% increase or 635 per day, 55% load factor. A loser of about $16,000 per day each for Delta and St Joe, break even for SW. St Joe's $32M will last 5 years at this rate, so it's a question of how long Delta wants to bleed.

A doubling of traffic makes everybody well, and Delta could help by raising fares at VPS to drive more to ECP. The game will play out in Dallas, Atlanta, and Jacksonville, but Bay county passengers can't lose for now.

in reference to: Delta will add larger planes at new airport | airport, new, delta - News - The News Herald (view on Google Sidewiki)

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