PPRuNe Forums - View Single Post - Bloomberg: EK still in talks on 748I
View Single Post
Old 22nd Jun 2014, 09:09
  #29 (permalink)  
777boyo
 
Join Date: Feb 2008
Location: S E Asia
Posts: 198
Likes: 0
Received 0 Likes on 0 Posts
380 vs 777 Economics

Gentlemen,

For us as Pilots to try to compare the relative economics and merits of the various types is an exercise in futility. There is no way we an even come close on the basis of fuel burn alone. There are way too many other costs involved which we are completely unable to assess -

Depreciation or Lease Costs - these will vary even by individual airframe, never mind fleet. And the cost of these will be allocated to individual routes or geographical area in some way using accounting conventions and company policy

Engineering - hourly, periodic, manpower, etc

Navigation/Overflight/destination handling -usually based on MTOW

Parking - also usually by weight or some other dimension

Crewing - salaries, accommodation, allowances, training. Some are overheads, some are variable costs.

Advertising/Promotion/Selling Costs - again, allocated to route by some accounting convention.

Catering - route specific, due to uplift at the other end

Share of the overall management "overhead" (DSVP cars, for example!)

The list goes on.... the above is not exhaustive.

The waters are muddied even more by the manufacturers, who will massage the numbers to their own marketing advantage - Cost per Available Seat Km will clearly favour the aircraft which has more seats. Trip cost will probably favour the smaller one, but Cost per Available Tonne Km on the other hand may favour the smaller airframe if its ability to uplift cargo is better than the bigger one.... It's a minefield, and I suspect there are very few people in the myriad EK departments who could really give an accurate number, other than a representative "average cost per block hour", or something similar. Then the revenue side of the equation is equally fraught with pitfalls in terms of assessing which type is optimal on a given route.

In short - don't waste your time and blood pressure by speculating on the basis of very limited information.

Have a look at Rigas Doganis' book, "Flying off Course", if you want an easily read intro to airline cost structures. And the Air Transport Association of America (ATA), also has some examples of airline costing models (excluding DSVP cars!) on its website (or at least, it used to - haven't looked recently).

Please forgive me if the above sounds like Grannies and Eggs - not my intention at all!

7B
777boyo is offline