The Economics of (a Minor) Failure

First, let me point out I’m safe. I am sitting in Heathrow, for the 2nd time today, waiting to get on my flight. For the 2nd time today.

Twenty minutes into flight I realized we hadn’t gone above 10,000 feet. Another minute later all cabin crew were called to the cockpit — over the PA system — and this, if you pay attention at all, and you haven’t had anything to drink and/or have a deep-seated fear of flying you totally forgot about until just the moment you hear this, will make you quietly fret. Then if you pull up the travel map on-screen and discover for the last ten minutes you’ve flown in circles, well… you’re pretty not happy.

We couldn’t pressurize. They tried everything ground crew suggested, none of it worked; so they confessed (our Captain was extraordinarily calming), and flew over the water to dump fuel (fun fact: dangerous to land a fully fueled plane, because the wings are so full of fuel). We spent 20 minutes dumping fuel that vaporized as it exited from the wings, it was both spectacular and appalling (to those of you on the east side of the English channel you may have an odd taste in the air…). Imagine a fire hose strapped to the wing of a plane (on the underside) and then turn it all…the…way…on. For twenty minutes.

After that completed we went back inland and landed.

We were handed 10GBP vouchers. For information, this purchased one tomato-and-mozarella sandwich, one bottle of water, and one glass  of wine. The flight was full (no space), and so this got me thinking about the economics of this little enterprise.

We flew a 747-400, which has a fuel capacity of 57,285 gallons and a passenger load of roughly 416 people (1) (for 3-class version, which is what I was in) but British airways uses 345 for their figure. The plane consumes 5 gallons of fuel per mile (2), at 250 knots per hour and we were up for 45 minutes. The delta between maximum takeoff weight and maximum landing weight is 240,000 pounds, which for fuel means 6.8 pounds per gallon of jet fuel, and therefore 35,294 gallons of jet fuel we had to dump. Currently, jet fuel goes to about $3.30 US as of today (3).

Including flight crew time (time starts when the door closes, for 8 crew members and 2 pilots they probably ran $800, maybe $1000 fully-loaded). I’m not going to include the passenger opportunity cost (e.g., I could’ve done something else for the hour or so this ate up), and they’re going to stick me on another flight that I do not also have to pay for, so they don’t get “credit” for the income of the ticket against the first flight. The rest of this we’ll assume is a dead weight loss.

  • Cost of the meal vouchers for passengers: 10GBP x (345-154) passengers (first class passengers were invited to the lounge for private dinner)=1,910 GBP, at today’s exchange rate is 1.55 USD to GBP, so $2960.50.
  • Cost of fuel burnt (45 flight minutes, which is 3/4 of an hour, at blended speed of 250kph (would actually be a little less, let’s call it 225)is roughly 845 gallons of fuel burnt, at $3.30/gal is $2785 in lost fuel.
  • Cost of fuel expelled: assuming they planned on their burn, they still needed to dump 35,294-845 gallons, which is 35,450 gallons (roughly) at current price is $117,000 roughly.

Total cost: $122,750 (very roughly). This sounds huge to an individual (it is) but in terms of overall expense I’d think it were a rounding error in terms of the bank of overall flights leaving Heathrow for British Airways.

There are other things here that should be flagged but are hard to quantify: costs incurred by passengers beyond their 10GBP purchase (which would be a plus to Heathrow but not British Airways), and the aforementioned opportunity costs. There’s also the plus/minus on the experience in terms of word-of-mouth — interestingly most people were jovial getting off the plane. The general feeling was one of “hey, we’re alive, and they let us know what was going on”. It’s interesting to watch people purchase items they didn’t really want to take full advantage of their free 10 quid, by the way. They’d come to the register having purchased their beer and sandwich, ask for change, realize they won’t get it, and then ask what they could get for 1.5GBP or what have you. The apostrophe here in Heathrow is doing a fair trade in bananas and nuts.

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