Operating Cost calculations
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Operating Cost calculations
I would like to make good calculation of the operation costs but I don't that my underatanding is cover everything or not. I use l this data for calculation : fuel cost/hours, Crews , Landing fees, ATC, Over fly fees.
Anyone could give me more details for the better calulate it. Give me advise Please
Anyone could give me more details for the better calulate it. Give me advise Please
Well letīs do this orderly.
1.Airplane: This may break down to a monthly cost and/or hourly cost e.g. maintenace reserves, APU reserves etc. you need to find these out and if monthly, break them down to estimated flight hours.
2.Maintenance: If you have a per hour maintenace contract, this is easy, but usually it is not so. So you need to try to get as close as possible to estimate your hourly maintenace cost. Bear in mind that some maintenace costs will be incurred whether you fly or not.
3.Crew cost: Again, this may divide into fixed (monthly)cost and hourly cost (per-diems, sector pay etc) You need to find a way to estimate your hourly cost. This may be quite complicated.
4.Insurance: Usually farily easy to convert into a hourly figure.
5.Fuel: Average block hour fuel use. Goes up and up and...
6.Route cost: Handling fees, Landing fees, Route charges (ATC and overflight fees), Pax handling fees (sometimes incl in handling) etc.
If you do this properly, you will know your hourly cost.
Add a margin for unknowns if you are going to sell for block hour.
Once you have done all this, you will probably want to go into a different business.
1.Airplane: This may break down to a monthly cost and/or hourly cost e.g. maintenace reserves, APU reserves etc. you need to find these out and if monthly, break them down to estimated flight hours.
2.Maintenance: If you have a per hour maintenace contract, this is easy, but usually it is not so. So you need to try to get as close as possible to estimate your hourly maintenace cost. Bear in mind that some maintenace costs will be incurred whether you fly or not.
3.Crew cost: Again, this may divide into fixed (monthly)cost and hourly cost (per-diems, sector pay etc) You need to find a way to estimate your hourly cost. This may be quite complicated.
4.Insurance: Usually farily easy to convert into a hourly figure.
5.Fuel: Average block hour fuel use. Goes up and up and...
6.Route cost: Handling fees, Landing fees, Route charges (ATC and overflight fees), Pax handling fees (sometimes incl in handling) etc.
If you do this properly, you will know your hourly cost.
Add a margin for unknowns if you are going to sell for block hour.
Once you have done all this, you will probably want to go into a different business.
Join Date: Jan 2004
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Hi folks!
The second one was quite well thought thru. Just let me put the structure in here which is used by several economy books dealing with this:
DIRECT operating cost
All that directly comes from moving your A/C from A to B, most of this can be calculated fairly easy per f.h.
1. Crew (flight deck and cabin crew along with ALL their payments! Not to forget secondary salary and allowances etc.)
2. Fuel
3. APT charges
4. En route (ATC)
5. Maintenance (depending on flight hours AND the duty cycles, so you also will need your average leg times...)
6. Depreciatoin (in the current market not to underestimate)
7. A/C rentals
8. Insurance
Then we come to the even more interesting
INDIRECT operating costs:
1. STATION costs (very difficult to get a real numbers here...)
2. Handling
3. Passenger services
4. Sales/reservation
5. Commissions
6. Ads and PR
7. General/Overhead cost/Admin
8. Other stuff which wasn't mentioned yet
Depending on the A/C type, the routes you fly, the APTs you will use, the outcome can be quite different. In the current European market you should try to achieve a mean production/operating cost of about 0.1 Euro per seat per km.
And as already mentioned, this is not really much to gain from any more. If you see that with some L/R flights a company makes in the end a total yield after taxes of 3000 Euro it is ridiculous to have so many people working on it
Hope this helps somewhat, sorry for the late and lazy response
~b
The second one was quite well thought thru. Just let me put the structure in here which is used by several economy books dealing with this:
DIRECT operating cost
All that directly comes from moving your A/C from A to B, most of this can be calculated fairly easy per f.h.
1. Crew (flight deck and cabin crew along with ALL their payments! Not to forget secondary salary and allowances etc.)
2. Fuel
3. APT charges
4. En route (ATC)
5. Maintenance (depending on flight hours AND the duty cycles, so you also will need your average leg times...)
6. Depreciatoin (in the current market not to underestimate)
7. A/C rentals
8. Insurance
Then we come to the even more interesting
INDIRECT operating costs:
1. STATION costs (very difficult to get a real numbers here...)
2. Handling
3. Passenger services
4. Sales/reservation
5. Commissions
6. Ads and PR
7. General/Overhead cost/Admin
8. Other stuff which wasn't mentioned yet
Depending on the A/C type, the routes you fly, the APTs you will use, the outcome can be quite different. In the current European market you should try to achieve a mean production/operating cost of about 0.1 Euro per seat per km.
And as already mentioned, this is not really much to gain from any more. If you see that with some L/R flights a company makes in the end a total yield after taxes of 3000 Euro it is ridiculous to have so many people working on it
Hope this helps somewhat, sorry for the late and lazy response
~b
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Thank you for your infos. Look like it takes some time to calculate operating cost since it need many infs to make as close as it's shall be. Like you said ! It's quite surprised how can LLC make a money by very low fair.
Any one got some operating cost for A330-200 and A320, So I could compare to mine.
Thanks so much
Any one got some operating cost for A330-200 and A320, So I could compare to mine.
Thanks so much
