Jul 08 2014
There’s an interesting article over at fivethirtyeight.com that discusses various ways that airlines could save money. Like many airline profitability studies this one focuses on things that Southwest Airlines does to remain in the black while other airlines seem to go through bankruptcy every five or ten years. For example, Southwest does not have any in-flight entertainment systems. That saves money in a whole variety of obvious ways (they don’t have to pay for the systems up front, and they don’t have the on-going costs of keeping the systems running) but also in less obvious ways.
Southwest runs about 1.6 million flights every year. At the most basic level, they are in the business of moving cargo (human or otherwise) from point A to point B, therefore one of their primary costs is fuel. The more cargo they carry, the more fuel is required. When I carry my cell phone I hardly know it’s there. Southwest jets have an average of around 140 seats. If I assume 100 of those are filled with passengers with cell phones, the weight becomes a bit more noticeable. Imagine loading up a box of 100 cell phones. and then repeat that for 1.6 million flights and the extra cargo weight adds up! In the article they crunched the numbers and determined that Southwest probably pays $1.2 million dollars in extra fuel costs just to carry all those phones. If passengers carry laptops that would add almost $21M in fuel costs. Entertainment systems – if they were present on Southwest – would add almost $40M a year in additional fuel costs. I found it interesting that entertainment systems apparently weighed more than laptops, but then I realized one factor was that planes are not always full. A laptop won’t fly by itself, but an entertainment system might.
Which brings me to what I thought was one of the more interesting propositions made in the article. Airlines that currently offer in-flight entertainment systems could save a ton (pun intended) by eliminating those systems and giving everyone an iPad instead! They could save even more by allowing passengers that bring their own iPad free access to the in-flight media server. Content could be uploaded to each plane while they’re loading passengers. The airline wouldn’t need to provide high-capacity iPads since everything would be viewed from the server, so the 16GB model would be plenty. The cost of a 16GB iPad currently hovers around $400, so they’re not cheap, but given the weight savings (and the fact that iPads could be loaded on an as-needed basis rather than always being on board) the fuel savings would likely more than make up for the added cost.
Using Southwest’s network as a proxy for similar-sized airlines carrying embedded in-flight entertainment systems, we found that fuel costs to carry these systems are approximately $39.7 million per year. When compared with installing embedded systems in the seats, simply handing everyone an iPad when they stepped onboard could save about $32.7 million per year in fuel costs.
Plus I have to imagine if Southwest Airlines called up Apple and ordered 100,000 iPads they would get a better price than $400.