lect3 - MIT MIT ICAT Operating Costs and Productivity...

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MIT ICAT MIT ICAT Operating Costs and Productivity Measures Dr. Peter P. Belobaba 16.75J/1.234J Airline Management February 15, 2006
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MIT ICAT MIT ICAT DOT Form 41 Form 41 contains traffic, financial, and operating cost data reported to the DOT by US Major airlines Data is reported and published quarterly for most tables Detail of reporting differs for different expense categories Aircraft operating expenses by aircraft type and region of operation Other expenses more difficult to allocate by aircraft type DOT Form 41 includes the following schedules: P12 : Profit and Loss statement P52 : Aircraft Operating Expenses P6 : Operating Expenses by Objective Groupings P7 : Operating Expenses by Functional Groupings P10 : Employment Statistics B1 : Balance Sheet
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MIT ICAT MIT ICAT Objective Cost Category Breakdown (3Q2005) Source: ATA data UNIT COST BY CATEGORY Cents per ASM 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 Labor Fu el Ow ne rs hip Pr of es si onal Se rv ic Landi ng F ees Fo od & Be ve ra ge Mai nt enanc e Mat er ial Pa ss enger Co mmi io ns Ins ur anc mmun at ion Ad om ot n Ut ils & Of fice Su ppl ie s Ot he r
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MIT ICAT MIT ICAT Form 41 Functional Cost Categories Aircraft operating costs Expenses associated with flying aircraft, also referred to as “Direct Operating Costs” (DOC) Aircraft servicing costs Handling aircraft on the ground, includes landing fees Traffic service costs Processing passengers, baggage and cargo at airports Passenger service costs Meals, flight attendants, in-flight services Reservation and Sales costs Airline reservations and ticket offices, travel agency commissions Other costs, including: Advertising and publicity expense General and administrative expense
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MIT ICAT MIT ICAT Activity Drivers by Functional Category Aircraft Operating Costs Per Block Hour (for example, $3415 for 185-seat B757-200 in 2003) Aircraft Servicing Costs Per Aircraft Departure (average $1135 in 2003) Traffic Servicing Costs Per Enplaned Passenger (average $18) Passenger Servicing Costs Per RPM (average $0.015) Reservations and Sales Costs % of Total Revenue (average 10%) Other Indirect and System Overhead Costs % of Total Operating Expense (average 12%)
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MIT ICAT MIT ICAT 2004 Functional Cost Breakdown
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lect3 - MIT MIT ICAT Operating Costs and Productivity...

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