It is true. Flights are incredibly cheap right now. Today I purchased a nonstop flight to Orlando, Florida from Baltimore, Maryland for $54.00 before fees and taxes from AirTran Airways. The return trip costs the same amount. This seemed incredibly cheap to me so I decided to do some research and see if they are actually making any money from me. It turns out that the airline reports their CASM (Cost per Available Seat Mile) on their accounting balance sheet for the year. The most recent CASM is 11.43 cents with all fuel costs. I did a quick search on the distance from Baltimore to Orlando and came up with 790 miles.
$00.1143 * 790 = $90.297
So It turns out that my $54.00 flight actually costs AirTran $36.30 more than I paid. I had expected this at that price. This does not mean the flight will not be profitable as this is just what I paid and not what the total revenue minus expenses is for that flight segment. It’s time to get to the skies!