40% labor cost

DFWCC

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Aug 19, 2002
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I shomehow recall hearing that labor is 40% of the cost of an airline ticket. I wonder what is the percentage of labor cost to build an automobile. Anyone out there know?
 

j7915

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Sep 7, 2002
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[blockquote]----------------On 1/12/2003 12:41:34 PM ual06 wrote: Don't know about the automobile; but, according to the ATA web site, Federal Taxes/Fees account for 26% of the cost of an airline ticket.

]http://www.airlines.org/public/industry/bi...--[/blockquote]

Maybe it is time for the airlines to itemize their ticket charges. Restaurants do it.
Do airlines charge the government for acting as collecting agents? There is a cost reduction revenue enhancing idea.

The airports could always install atms at the security gates, pay as you go. I recall getting charged in Montreal for some airport fee or other that was not included in the fare, they were nice, took US Dollars, lightened the load in my "carry on baggage".
 

flyhigh

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It's actually about 40% of expenses...not ticket revenue. It is also a figure that is inclusive of salary & benefits.

The big question to ask is if that is an irrational level compared to similar business'.
 
Dec 5, 2002
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[blockquote]
----------------
On 1/12/2003 2:31:08 PM j7915 wrote:

Maybe it is time for the airlines to itemize their ticket charges. Restaurants do it.
Do airlines charge the government for acting as collecting agents? There is a cost reduction revenue enhancing idea.

The airports could always install atms at the security gates, pay as you go. I recall getting charged in Montreal for some airport fee or other that was not included in the fare, they were nice, took US Dollars, lightened the load in my "carry on baggage".


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[/blockquote]

You do. The customer. It's baked into your fare. And we all collect for the government for free. No one gets paid for it. Not IBM nor UAL.
 

KCFlyer

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Aug 20, 2002
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[blockquote]
----------------
On 1/12/2003 11:16:02 AM DFWCC wrote:

I shomehow recall hearing that labor is 40% of the cost of an airline ticket. I wonder what is the percentage of labor cost to build an automobile. Anyone out there know?
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[/blockquote]

That all depends on the make and model of the car in question. There are an awful lot of "American" cars that are built by a guy in Mexico who is paid $5 a day, but they are priced as if a 25 year UAW vet built it.
 
Dec 5, 2002
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[blockquote]
----------------
On 1/12/2003 11:16:02 AM DFWCC wrote:

I shomehow recall hearing that labor is 40% of the cost of an airline ticket. I wonder what is the percentage of labor cost to build an automobile. Anyone out there know?
----------------
[/blockquote]

You could check the annual reports for Ford, Toyota, ... to see the breakdown. Not sure if they break it down as detailed as you may want though. I would be leery of taking this comparison too far, very different business models.
 

JS

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[blockquote]
----------------
On 1/13/2003 2:11:01 PM Rational Thought wrote:


You do. The customer. It's baked into your fare. And we all collect for the government for free. No one gets paid for it. Not IBM nor UAL.

----------------
[/blockquote]

The government does not reimburse anyone for tax collections. Why should they? It's a tax, not a private ASO (Administrative Services Only self-insurance plan).

Besides, even if they did reimburse, it would be zero, because it costs airlines nothing to collect taxes. The computers do a few extra calculations on top of the base fare calculation, the passenger pays one total amount, and the airlines EFT the tax portion of that over to the government. It's not like the airlines are having to collect individual incomes taxes for the IRS. It's similar to a sales tax -- you multiply by 1.0825, charge the customer the total, and send the government its share.
 

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