Operating Costs and Productivity Measures
MIT ICAT
Operating Costs and Productivity Measures
Dr. Peter P. Belobaba 16.75J/1.234J Airline Management February 15, 2006
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
0 .0 0
0 .5 0
1 .0 0
1 .5 0
2 .0 0
2 .5 0
3 .0 0
3 .5 0
MIT ICAT
Labor
Fuel
Ownership Professional Services Landing Fees Food & Beverage Maintenance Material Passenger Commissions Insurance
U N IT C O S T B Y C A T E G O R Y
C ents per A S M
Communication Ad & Promotion Utils & Office Supplies Other
Source: ATA data
Objective Cost Category Breakdown (3Q2005)
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
MIT ICAT
Activity Drivers by Functional Category
• Aircraft Operating Costs
– Per Block Hour (for example, $3415 for 185-seat B757-200 in 2003)
•
Operating Costs and Productivity Measures
Dr. Peter P. Belobaba 16.75J/1.234J Airline Management February 15, 2006
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
0 .0 0
0 .5 0
1 .0 0
1 .5 0
2 .0 0
2 .5 0
3 .0 0
3 .5 0
MIT ICAT
Labor
Fuel
Ownership Professional Services Landing Fees Food & Beverage Maintenance Material Passenger Commissions Insurance
U N IT C O S T B Y C A T E G O R Y
C ents per A S M
Communication Ad & Promotion Utils & Office Supplies Other
Source: ATA data
Objective Cost Category Breakdown (3Q2005)
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
MIT ICAT
Activity Drivers by Functional Category
• Aircraft Operating Costs
– Per Block Hour (for example, $3415 for 185-seat B757-200 in 2003)
•