Demand for medical equipment is making air cargo fees ‘crazy’

Re:Demand for medical equipment is making air cargo fees ‘cr... by fragmede on Monday March 30, 2020 @12:19PM (#22729260)

It's not hard, just more expensive. I imagine not having 200-some people paying, let's say $150, would mean air cargo would have to cover the $30,000-ish difference. There's additional cargo space because the baggage hold is no longer taken up by passenger baggage, but with airlines charging passengers $50/bag, we might be able to guess at the opportunity cost to airlines for taking something the average size and weight of a passenger's checked bag.

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Re:Demand for medical equipment is making air cargo fees ‘cr... by CPLX on Monday March 30, 2020 @12:46PM (#22729604)

> It's not hard, just more expensive. I imagine not having 200-some people paying, let's say $150, would mean air cargo would have to cover the $30,000-ish difference.

I think you are drastically underestimating the typical revenue of a long haul or international flight.

A good starting point is RASM, or average revenue per available seat mile. For the airline industry a reasonable benchmark for that is about 15 cents, or so.

So multiply the number of seats on the plane by the number of miles and you'll get something that's at least in the same order of magnitude for passenger revenue on a flight.

Since we know air freight only really makes sense for long distances or over water -- you're going to be using a truck to get medical supplies from Dallas to NYC, and it will take less than 24 hours -- let's pick a good example route:

HKG > LAX on a 767, a standard wide-body

7,243 miles x 375 seats x $0.15 = $406,912.50

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Re:Demand for medical equipment is making air cargo fees ‘cr... by Baeocystin on Monday March 30, 2020 @02:16PM (#22730603)

Not the person you were replying to, but that is definitely much higher than I would have guessed. How do you derive the $0.15 / a mile you used as a rough estimate?

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Re:Demand for medical equipment is making air cargo fees ‘cr... by CPLX on Monday March 30, 2020 @02:42PM (#22730874)

I mean it just kind of has to be higher for anything to make sense. The depreciation/fixed costs of operating a 767 for an hour is around $10k plus another $20k or so for fuel. That's a couple hundred grand for an 8 hour flight before you even get started with the expense of actually running an airline as a business.

So we know the post guessing $30k in passenger revenue for a typical flight is in the wrong order of magnitude.

For the number I kind of picked 15 cents out of my ass, it's a number I've seen in the past year in earnings reports for the majors and it easily gets us into the basic range we're talking about. Just google the terms RASM, PRASM, and CASM and you'll find a ton of info, that's the basic jargon used in the business to come up with info of this type.

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Re:Demand for medical equipment is making air cargo fees ‘cr... by Baeocystin on Monday March 30, 2020 @04:23PM (#22731918)

Thank you for the reply. Knowing which keywords apply helps. Much appreciated!

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