Justlocal, you have to separate overhead costs from operating costs to find the true cost of operating the aircraft - which will vary depending on how many hours it flies per year. The more the a/c flies the cheaper its per hourly cost becomes.
Operating costs per hour are what it costs you as the a/c flies eg fuel, oil, crew (if paid hourly), any maintenance periods that will be flown out of hours before any due date arrives (if the due date is expected to arrive but only partially flown out, the cost per hour for that item will increase), engine & prop reserve (overhaul/replacement cost / TBO) and the like. These sort of items are a relatively fixed cost per hour of use, ignoring inflation during the period. A reserve % for unanticipated events can be included here too.
Overhead costs are those costs that will fall due whether or not the a/c flies. Things like hangarage, insurance, crew costs (if salary), any maintenance that will fall due during a period of disuse, any other yearly costs and the like. Even administration costs. In the US you would include a Customs sticker per year if you intended to take the aircraft fly internationally.
It's also possible to have another category: Variable costs ie those costs that don't happen on a schedule, and may or may not occur on a flight eg landing fees, ATC fees, approach fees, catering, etc. Some people average these out over a year to make calculation simple by including the amounts as Overhead. Others treat them as add-on costs that get considered on a per flight basis.
It's the Overhead Costs that mostly lead to a variable total cost to fly your aircraft / hour but Variable Costs also make a difference. The more the a/c flies the more hours across which those overhead costs can be amortised.
Last edited by Tinstaafl; 21st May 2009 at 04:59.