# Profit per person per use

A Simple Way to Think About Corporate Greed

I recently read the following headline: “Delta’s CEO said AI will boost profits by 50% by setting a different ticket price for every passenger in real time.”

Two considerations to add some context to this apparently dystopian headline.

First, how much of those “extra profits” remain profits rather than becoming passenger surplus depends on how competitive the industry is. The closer it is to a cartel, the more profits remain profits, whereas the closer it is to perfect competition, the more this results in lower (or unchanged) ticket prices, as companies reduce their margins to compete for customers. The takeaway is that, as I keep drumming, whether AI will be a force for good or bad depends not much on technological considerations, but rather on whether our society is in “good order,” i.e., whether it elects competent leaders, is high-trust and common-sense, has solid values, strong legal frameworks, healthy markets, etc.

Second, what orders of magnitude are we talking about here? Airline profits are about $7 per passenger per flight, so when Delta’s CEO says AI will boost profits by 50%, he’s talking about an increase of about $3.50. Conversely, about $40-$60 of ticket prices are explained by taxes (data for domestic US flights). So, if we care about ticket prices, the culprit should probably be sought somewhere other than AI.

## Profits per person per use

I find this analysis, profits per person per use, rather useful when analyzing whether high prices depend on corporate greed. For example, in my 2025 book [_Poverty and Prosperity_](https://luca-dellanna.com/books/poverty-and-prosperity), I wrote:

In 2023, Spanish politicians blamed the supermarket chain Mercadona for soaring grocery prices. But when you look at the numbers, Mercadona’s entire profit increase was just €0.37 per customer per week: hardly enough to explain why families were paying so much more for groceries.[^1] Similarly, discount airline Ryanair has been accused of price gouging because it charges for hand luggage and seat reservations. Yet when you divide its 2024 profits by the number of passengers, it amounts to less than $11 per person per flight: hardly an unreasonable amount.[^2] This is not to say that companies aren’t greedy. However, greed typically leads to higher prices only in the presence of cartels or monopolies; otherwise, it usually manifests as lower prices to gain market share.[^3]

The point is, whenever you’re trying to evaluate how greedy a company is, it often pays to take its yearly profits, divide them by the number of items sold, and check how reasonable that amount is. Bonus points for comparing it with taxes per item sold.

PS: This morning I fueled my car here in Italy. I paid €69, of which about €16 was material costs, €12 refining and distribution costs, €3 profit margins, and €38 taxes. But sure, the problem is the greedy oil companies.

[^1]: Mercadona’s 2023 profits were €1,009 million, up from €718 million in 2022: an increase of €291 million. They serve 5.8 million households, and the average Spanish household has 2.58 people, for a total of 14.96 million customers. Dividing €291 million by 14.96 million gives 19.45€. Since this increase took place over a year, it amounts to 0.37€ per week per customer. Source: their 2022 and 2023 Annual Reports.

[^2]: Ryanair’s 2024 profits were €1.92 billion, and it carried 183.7 million passengers. That averages to €10.45 per passenger. Source: their 2024 Annual Report.

[^3]: There exist counterexamples that are not cartels nor monopolies (Coca-Cola raising prices without losing market share comes to mind), but these cases usually involve a large customer surplus to divide between the company and its customers, not a bad situation to be in. And that surplus is usually the result of, you guessed it, greed: the drive that pushes people to work tirelessly to deliver better products and lower costs, creating a surplus that can then be shared between the company and its customers. As French entrepreneur Florent Crivello wrote, “The world would be a much better place were people more motivated by money. We have this beautiful distributed system telling us where our time would be best spent, and somehow we’ve made it culturally unacceptable to listen to it.”