It’s a rather complicated subject but basically it’s a method of working out a balance of time related costs Vs fuel related costs.
I'll try to explain. If an aircraft requires maintenance after 100 hours of flight and it costs £10,000 for the check then maintenance cost £100 per hour.
If the aircraft is flown on the same route which is 1 hour per flight at normal cruse speeds then you can see that maintenance costs would be £100 per flight. Now what happens if we fly faster? We could fly the route in 48 mins that would mean for every 5 flights we get 1 free.
So if we charged the passengers a total £1000 per flight, normally we would make £900 with £100 going towards maintenance so for our 100 hours we would make £90,000. However, if we have flown faster we have had an extra 20 flights with no maintenance fee so that’s pure profit of £20,000!
So by increasing our cruise speed we have increased profits by more than 20% BUT we haven’t considered the dreaded FUEL COSTS!
If our aircraft burns £10 per minute, our one hour flight costs £600 in fuel. So now we have a total cost of £700 and a profit of £300 per flight. Our aircraft flying our route at standard speed earns us £30,000 per maintenance cycle.
Now if we fly faster we know that we get an extra 20 flights BUT if we want to fly faster, we need more thrust hence we need to burn more fuel. If we want to do our route in 48 mins we accept we are going to burn more fuel so we need to know if it’s economical to fly as fast as possible or if we should accept the maintenance increase because we will save fuel costs.
This is a cost index.
If we fly our aircraft at the 48 min speed our fuel burn increases to £15 per min so fuel burn per flight is now £720 per flight and the maintence cost (now spread over the 120 flights) is approx £84 per flight. Our profit is £196 X 120 flights. Total £23520 per maintenance cycle
So you can now see that flying faster because of the extra fuel burn would cost us an extra £6480.
There maybe a speed that will get us there in under an hour but burn less than flying at the 48min leg speed. This is where you need a cost index.
If we give the standard speed a cost index (CI) number of 0 and the 48 min leg speed a CI of 200 we will then have alot of numbers in between.
So an airlines operations department will feed in the route to a computer which will work out what number is appropriate to the flight. The pilots then get this number to put into the flight computer.
There are ALOT of variables to take into consideration and I have only really considered 2 of them. Crew pay, wind speed direction, Nautical air miles etc. are all things that impact a cost index.
I've tried to explain as simply as I can so I hope it makes sense (or hopefully someone can elaborate better than me
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So to sum up a CI (on the Boeing 737 anyway) is a number between 0-200 which the pilot feeds into the computer. The higher the number, the faster you fly.
