Air Mauritius overcharging or AirAsia X operating at loss?

Article By A.F. in Kuala Lumpur

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AirAsia craft landed at Mauritius Airport

The cost of flight operations may vary between aeroplanes and airlines, but proper calculations could reveal the real cost of a flight journey from one destination to another.

The question is whether AirAsia X’s low-cost flights to Mauritius were total losses as claimed by some in Mauritius or is Air Mauritius overcharging the travellers from Mauritius?

To explain how these costs are calculated, let’s see what are the costs of operating an airline, starting with the aircraft operational expenditures:

A typical Airbus A330-300 would cost about $29,851 a day to operate in the United States, where costs are relatively lower than operating an airline in Mauritius.

Air Mauritius usually uses the A330-200 which has a little lower operating cost than the A330-300, coming at $28,149 per day in the US.

But given that it is the same plane used by Air Asia X to Mauritius, and given that operating from Malaysia may be relatively cheaper, there are still many questions.

There is already a price differentiation here that is from $29,851 for the AirAsia X flight to the $28,149 for the Air Mauritius flight, but it is not one that would cause Air Mauritius tickets to be double that of AirAsia’s.

Ticket prices

Air Asia’s ticket price is about RM1,500 on average to Mauritius, including a checked in baggage 20kg and 2 meals.

Overall, AirAsia X is charging at times, less than half the average ticket price from Air Mauritius.

A flight of Air Mauritius on the same route would cost easily RM3000 plus, and yes you get more checked in baggage, 40kg but only 1 meal, but if you are paying more than double for your airfare, you would expect to get more services, not a compromise on any aspects.

Yes, Air Mauritius would loan you blankets and give you amenity kits for free yet it does not weigh that much in comparison to Air Asia X’s services.

Plus, Air Mauritius would hand over generic pouches, almost not used by anyone if you may guess.

Now, we have the estimated cost of operating the planes for one day, and the ticket prices.

What goes into the costs?

Here are the items that go in the cost of flying a commercial aircraft from one destination to another:
• Fuel
• Aircraft amortisation
• In-flight crew salaries
• Ground crew salaries (boarding crew, aircraft preparation, and cleaning, luggage loading, etc.)
• Catering
• Various insurances
• Airport fees (landing tax, etc.)
• Overflight fees
• Administrative cost (managing/issuing tickets, etc.)

An average flight on a Delta Air Lines 737-800 costs $5625 per hour and the plane burns 850 gallons per hour.

Fuel costs $4,156 based on Jet-A fuel costing $4.89 a gallon in the US, and it may be costlier in Mauritius, but we do not have access to that information.

But in the US, a two-cockpit crew and five flight attendants would cost around $500 an hour.

Then there is another $1000 average that goes into maintenance and depreciation costs.

In comparison, an average flight on an American Airlines 737-800 will cost $5308 per hour to operate.

It will also absorb some $6000 for the other costs as per the example above.

These examples were taken from the article entitled ‘Aircraft Operating Series – Aircraft Operating Expenses’, written by Cole Coldberg on April 5, 2015 on opshots.net, an aviation website.

The above point shows that there is a variation between different airlines in the same category, but the operating cost gap is not that huge.

Now, we don’t know the cost of a flight from Mauritius to Kuala Lumpur, but if we take the explanation above and the payload for an Air Mauritius A330-200 which is about 275 – which is more than this type of plane would usually carry that is 247 passengers.

This tells us that Air Mauritius fits in more passengers to either beef up its profit range or to cover its heavy costs.

What would these other costs be for Air Mauritius?

It is definitely certain that Air Mauritius is run with high costs otherwise it would not charge its passenger’s such hefty ticket prices!

On top of that, Air Asia, for example, has more passengers on the plane but has more leg room in the plane, but they do have 1 more seat in each row compared to Air Mauritius but has less leg space.

For Air Asia, the plane is a little longer than Air Mauritius’s typical plane, but since they are a low-cost carrier the seating would typically be 440 people on the plane but they only fit about 377 seats instead.

If a low-cost carrier were to use an Air Mauritius plane it would seat around 406 passengers.

Even though operating a small airline can be more costly on aggregate because it might need the same amount of expertise and some operation costs might be higher due to lack of linkages and access to cheaper service facilities, it cannot be that high.

And this is based on comparison to the Delta or the American Airlines, for the simple reason that we do not have access to data either from Air Asia or Air Mauritius to know the exact costs.

Award Winning

AirAsia X, an award-winning airline is definitely flying to new routes with the aim of not losing money for sure, and it is a profit making company as of last year with its profit jumping to record highs.

Air Asia X did not use the Mauritius flights as an experimental flight like some people are arguing, because Air Asia X offered promotional prices for a certain time only.

And it signed up to a contract with Mauritius – and its various agencies – on the newly launched Mauritius-Asia Air corridor, a corridor that is still active.

AirAsia tried to use the Mauritius corridor to link Australia to Mauritius with its low-cost flights altogether from Australia and these tells us a different story from what we are hearing from officials in Port Louis.

That is to say, Air Asia X had already calculated the potential losses it would make with the promotional flights before it engaged with Mauritius airports such a contract.