EK higher operating costs

[pool]

From the latest operational update:


.... the twin issues of lack of premium traffic and higher operating costs are squeezing margins to previously un-experienced depths ....


I need help on this one:
What exactly leads to higher operational costs? Fuel is cheaper and the pilots work for about half of the money as two years ago.
Is it the increased number of VPs? The higher bonus for the managers? The inflation adjusted profit for their Highnesses?

Honestly, I need an explanation, or are they maybe stretching the truth again?

[Skylion]

It's unlikely that the 380 is any more of a drain on finances than any other new delivery. EK probably got a very good deal on its massive orders and especially the early aircraft and they will do a good job. The higher density versions will add capacity at a reasonable low incremental cost despite 4 engines v 2 and the lower density ones put EK in a very strong position in the now intense battle for premium business. The route network providing particularly good links between secondary points and other secondaries and secondaries to primaries is robust and spreads risk over a multiplicity of markets unlike carriers such as BA who are overwhelmingly dependent on the N Atlantic. It is inevitable though that EK, like everyone else, will seek to reduce costs wherever possible right across the airline or they will come out of the present bloodbath with costs higher than those of its competitors and that is not sustainable. The same is happening worldwide in all businesses and industries .Aviation is not unique and existing carriers therefore have to take this opportunity to restructure their costs and get to the new order of things before new entrants come in with a lower cost base.

[Panther 88]

thanks for that Skylion. And I am sure you were responding to the A180 comment. But Pool was wondering where the increase in COSTS are coming from? No bonus, no pay raise, fuel prices somewhat stablized, probably less staff, no overtime pay, cap on water usage, factoring of flight time, less fuel burn according to reports.....on and on. He's not asking about the loss of revenue, but the report of increased costs. Help anyone?