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Understanding Operation Costs of Urban/Regional Air Vehicles - Coggle…
Understanding Operation Costs of Urban/Regional Air Vehicles
Direct Operating Costs
Flight Operations
Flight Crew Expense
(salaries, traveling expenses, commonly expressed as hourly cost per aircraft type.
Hourly Flight Cost Per Aircraft Type
= Hourly Flight Crew Costs x Block Speed(avg speed of aircraft)
Fuel and Oil
, generally computed on a route by route basis
Include all relevant taxes/duties, varies heavily
Fuel consumption normally is computed on a
route-by-route basis
Oil is typically calculated by establishing and hourly oil consumption for each type of engine. Calculated by using
number of engines
x
hourly oil consumption
x
block time speed
Airport and en route Charges
, generally negotiable based on size of airport/major airlines
Passenger Facility Charge
, based on number of passenger boarded
Landing Fee
Aircraft Insurance Costs
Hull Premiums
Ranges from 1-2%, depending on airline, number of aircraft insured, geographic area.
Liability Premiums
Generally based on estimated number of revenue passenger miles flown
Maintenance and Overhaul Costs
Direct Maintenance on Airframe
Direct Maintenance on Engine
Maintenance Burden
Administrative and overhead costs that cannot be attributed directly to a particular airframe/engine
Depreciation and Amortization
Airlines tend to use straight-line depreciation over a given number of years, residual value(salvage value) of
0 to 15 percent.
FOR SMALLER short-haul aircraft, depreciation periods are typically shorter, generally
8-10 years
.
Hourly Depreciation Cost
=Annual Depreciation Cost/Aircraft's Annual Utilization(number of block speed hours in a year)
Flight Crew training, developmental/pre-operating costs are typically
amortized
and spread out over years
Indirect Operating Costs
Station and Ground Expenses
Salaries and expenses of the airline staff located at the airport, handling, servicing, rents potentially paid for some properties used.
Passenger Service Costs
Largest single element of costs arising from passenger services are expenses related to
aircraft cabin staff,
hotels, training
Costs directly related to passengers, in-flight catering, meals, accommodations due to cancellation/delays
Reservations, Sales, and Promotional Costs
Staff expenses, costs of advertising, familiarization costs of journalists, commissions paid to travel agencies are included here.
General and Administrative Costs
Varies heavily airline to airline
Non-operating Costs and Revenues
Gains/Losses arising from the
retirement
of property/equipment
Interest paid on loans
Gains/losses arising from affiliated companies(ex. an owned commuter carrier)
Direct government subsidies or other government payments
Other, losses/gains from foreign exchange transactions, sales of shares or securities
Cost Distinctions
Fixed
Do not vary with changes in
ASM
(available seat miles, "level of output"). Most indirect operating costs are fixed costs, in that they do not depend in the short term on the amount of flying undertaken.
Variable
Avoidable in the short-term