Originally Posted by
davidjohnson6
what are the big extra costs that causes BA shorthaul to lose money.
Wages ? Old aircraft burning more fuel ? Longer turnaround ? Not imposing baggage charges ? Something else ? I'm sure everything contributes but am interested to know which are the major factors and not just minor
The biggest issue for established carriers is on the revenue side, not the cost side, and it is transfer passengers. Say tickets from Gatwick to Barbados are being sold for £600. You will find that Manchester to Barbados is being sold for maybe £650, or even £600, or once in a while for £550. This is because revenue is determined by what you can get for it, governed by demand and competition, and only obliquely related to cost.
So if it's £650 from Manchester, how is that attributed between the two flights. There are an infinite number of ways of doing it, but almost all result in the domestic/short-haul connection getting only a fraction of the revenue that the same flight would receive from an O&D ticket on the route. A fair few such passengers on the flight means a loss.
Through tickets are almost always less than the sum of the two O&D sectors added together, yet there are acually additional costs compared to two equivalent single-sector passengers, in terms of handling misconnected passengers (Manchester inbound is late, Barbados operates only once a day, and the hotac eats up any profit) along with increased transfer baggage mishandles etc.
Easyjet do not do connecting tickets and thus are not in for any of this.