PPRuNe Forums - View Single Post - LIVERPOOL - 2
Thread: LIVERPOOL - 2
View Single Post
Old 1st Apr 2010, 00:19
  #500 (permalink)  
uklad007
 
Join Date: May 2006
Location: UK
Posts: 133
Likes: 0
Received 0 Likes on 0 Posts
It might be that 70% is the breakeven for the journey LPL-AMS only - regardless of where a passenger flies off to or doesnt thereafter each sector will take its share of the costs and revenue on a through ticket (obviously much simpler if its just to AMS ) but as you say MUFC_FAN a large proportion of Pax would go onto longhaul where they will make the money on those routes.

It is perfectly possible to talk 70% breakeven in terms of LPL-AMS only but as it all goes into one Group AF-KLM pot at the end of the day to operate feeder routes at breakeven or a loss to then get most pax onto profitable longhaul overall benefits the company.

Look at all the feeder routes KLM has into AMS - MME/HUY/NWI etc etc - some feeders make money in their own right, some are loss making but in the bigger picture bring transfer pax. This is why they will be happy to go against Locos not only from the UK but from other countries too - Locos typically dont feed traffic (some pax will get off one plane and re-check in for another admittedly) but they make their money only from operating the point to point, KLM makes its money in some cases point to point, in most on transfer.

Look at, Lufthansa with its hub and spoke operations or BA at Heathrow (might be a bad example at the moment) or in fact look at Heathrow itself - one of the busiest international airports in the world - why? not because all those pax just visit the UK - (we wouldnt have half as bad a deficit in the budget if they did) , but because they transit through.
uklad007 is offline