Freight revenue
Thread Starter
Joined: Dec 2011
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From: MUC & ARN
Freight revenue
I am trying to calculate how much revenue and airline makes from passengers and freight. I assume that an airlines will top-up aircrafts with freight once the passengers are loaded. I am doing the calculations for long haul flight (A340-600, 5700NM).
For the revenue from passengers I am assuming 4-5% from the ticket price and 100kg for PAX + bags.
I have two questions:
1) What would a rough estimate be for the revenue per kg freight on long haul PAX flights be?
2) How much of the payload can be effectively used for PAX and freight? The A346 has a max payload of 68t, I assume a certain percent of this does not generate revenue (e.g. crew, food, ..)
Thanks for all and any help
For the revenue from passengers I am assuming 4-5% from the ticket price and 100kg for PAX + bags.
I have two questions:
1) What would a rough estimate be for the revenue per kg freight on long haul PAX flights be?
2) How much of the payload can be effectively used for PAX and freight? The A346 has a max payload of 68t, I assume a certain percent of this does not generate revenue (e.g. crew, food, ..)
Thanks for all and any help
Joined: Feb 2012
Posts: 728
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From: Cape Town / UK / Europe
It's a difficult calculation and you can only get averages.
Some freight is carried as and when space is available, and attracts a lower rate, whereas other types, for example urgent and perishable, are booked and must travel on a specific flight, thus attracting a higher rate.
There is also the question of different commodities attracting different rates based on the difficulty of handling and the volume/density. As an example, 200 kilos of books would be easy to handle, non fragile and possibly non-urgent, whereas 200 kilos of flowers would be urgent, perishable, and low density and would thus need to be charged a much higher rate.
When I worked on the freight side there were three different rates, I think it was overnight, 2 day, and general freight and that we worked on a very rough average figure of USD 1.00/0.50/0.35 respectively per kilo/1000 km.
Some freight is carried as and when space is available, and attracts a lower rate, whereas other types, for example urgent and perishable, are booked and must travel on a specific flight, thus attracting a higher rate.
There is also the question of different commodities attracting different rates based on the difficulty of handling and the volume/density. As an example, 200 kilos of books would be easy to handle, non fragile and possibly non-urgent, whereas 200 kilos of flowers would be urgent, perishable, and low density and would thus need to be charged a much higher rate.
When I worked on the freight side there were three different rates, I think it was overnight, 2 day, and general freight and that we worked on a very rough average figure of USD 1.00/0.50/0.35 respectively per kilo/1000 km.
Joined: Apr 2004
Posts: 950
Likes: 3
From: North, UK
There is a published IATA tarriff for freight which I venture is very raerly used.
Then you have a tarriff from the airline themselves, generally receved n a monthly or quarterly basis.
Then you have 'specials' on particular routes.
Finally and the most common way of obtaining a freight re now is when you reach a certain point (shall we say 500 kilos) but can be less, you pick up the phone and say Mr. Airline I have x amount of kilos to go to x destination what rate will you give me.
So unless you are in revenue management at the airline I would venture it is quite difficult even for me as a freight forwarder to estaimate what the average would be on a given route. I could guestimate but that is all it would be.
Finally of course as been mentioned above for perishables and hazardous materials you would find yourself paying a premium but still probably not the published rates.
The actual truth of the matter is that nowadays the surcharges usually tally up to more than the freight rate.
Then you have a tarriff from the airline themselves, generally receved n a monthly or quarterly basis.
Then you have 'specials' on particular routes.
Finally and the most common way of obtaining a freight re now is when you reach a certain point (shall we say 500 kilos) but can be less, you pick up the phone and say Mr. Airline I have x amount of kilos to go to x destination what rate will you give me.
So unless you are in revenue management at the airline I would venture it is quite difficult even for me as a freight forwarder to estaimate what the average would be on a given route. I could guestimate but that is all it would be.
Finally of course as been mentioned above for perishables and hazardous materials you would find yourself paying a premium but still probably not the published rates.
The actual truth of the matter is that nowadays the surcharges usually tally up to more than the freight rate.
A Runyonesque Character
Joined: Apr 2004
Posts: 1,209
Likes: 2
From: The South of France ... Not
For a typical scheduled longhaul pax service, say between Europe and the Far East, the passenger yield is about 6 or 7 Euro cents per kilometre. The freight yield per tonne is about 17 cents per km. So a tonne of passengers - say 11 of them including their bags - generates on average 4 times as much revenue as freight.
But as others have said, some freight is high yielding and may take precedence over passengers. Since freight travels one way and flows may be highly directional, aircraft may be carrying high-yielding traffic one way and filling up with whatever they can find, at little better than marginal prices, in the other direction.
When calculating cargo capacity you also must take into account the density - aircraft are limited by weight as well as by volume, You can fill an aircraft up to its max weight with gold bars and there will still be plenty of space remaining. For more information I suggest you ask the Freight Dogs.
But as others have said, some freight is high yielding and may take precedence over passengers. Since freight travels one way and flows may be highly directional, aircraft may be carrying high-yielding traffic one way and filling up with whatever they can find, at little better than marginal prices, in the other direction.
When calculating cargo capacity you also must take into account the density - aircraft are limited by weight as well as by volume, You can fill an aircraft up to its max weight with gold bars and there will still be plenty of space remaining. For more information I suggest you ask the Freight Dogs.
Joined: Oct 2002
Aviation Qualifications: PPL
Posts: 8,208
Likes: 351
From: London UK
For freight there are two considerations, what is its weight and what is its volume.
The two major worldwide freight/package carriers give great attention to this in their aircraft selection. Aircraft can "bulk out", that is the cargo area is physically full befor ethe aircraft gets to maximum takeoff weight. Or it can "gross out", which is the opposite, the MTOW is reached while there is still space in the holds. The ratio of cubic capacity per tonne varies of course between cargoes.
A glance at your supermarket fresh fruit/vegetable section will show some long hauls, green beans from East Africa for example. These would not be economic to airfreight by themselves, but because the predominant freight flow is of high value and manufactured goods from Europe down to Africa, there is scope on the return to carry such loads at a significantly lesser rate, and still maximise the overall revenue.
The two major worldwide freight/package carriers give great attention to this in their aircraft selection. Aircraft can "bulk out", that is the cargo area is physically full befor ethe aircraft gets to maximum takeoff weight. Or it can "gross out", which is the opposite, the MTOW is reached while there is still space in the holds. The ratio of cubic capacity per tonne varies of course between cargoes.
A glance at your supermarket fresh fruit/vegetable section will show some long hauls, green beans from East Africa for example. These would not be economic to airfreight by themselves, but because the predominant freight flow is of high value and manufactured goods from Europe down to Africa, there is scope on the return to carry such loads at a significantly lesser rate, and still maximise the overall revenue.
