Wednesday, January 12, 2005

Loads 1: Paying Pax

CBC is reporting that Air Canada enjoyed record passenger loads of 75.2 per cent in December, with a load factor of 77.5 per cent over the year. WestJet reported a December load factor of 74.7 per cent, better than the December 2003 figure of 73.6 per cent, but WestJet's full-year load factor was down 0.6 per cent to 70.0 per cent.

Load factor refers to the percentage of seats filled by paying passengers. For a scheduled airline, load factors are very closely related to profits. The fixed cost of flying an airplane on a scheduled route is so high that a majority of the seats must be sold just to break even. Pilots know that their paycheques depend on exceeding the break even number of passengers. Management tells the pilots what that number is, but pilots always believe management is overstating it, in order to justify denying raises.

Load factors themselves are as closely guarded as company financial information. A three way lawsuit slugfest in progress among Air Canada, WestJet and JetsGo began with allegations that WestJet was systematically spying on Air Canada's loads. Whether it consists of pilots turning their heads to see how many people walk across the tarmac from a competitor's aircraft in Williams Lake, or management going through each other's trash, everyone keeps an eye on load factors.

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