This paper deals with cost drivers in the airline industry. A theoretical approach including examples is used. The objective is to gain a clear understanding of what problems airlines are facing within the industry and about the challenges they have to master concerning cost related topics. What are the key determinants behind cost related figures? This paper consists of five major parts. The first part explains the necessity of costing. Why should this topic be taken into account with regard to the airline industry? Therefore, a presentation of profitability within the industry and the significance of costing is presented. The second part demonstrates an overview of the general spreading of expenses, while the third part displays the categorization of costs. This is crucial for a clear understanding of the business; therefore, non-operating aspects have to be excluded. The last section deals with cost topics from different perspectives, such as e.g. total cost, unit cost or external cost factors. Essential matters such as the controllability of costs or BELF are additionally taken into account.
Table of Content
List of Abbreviations
List of Tables, Figures and Equations
1. Executive Summary
2 Introduction
2.1 Current Profitability of Airlines
2.2 The Significance of Costing in the Airline Industry
3 The General Spreading of Costs
4 Classification of Expenses
4.1 Non-Operating and Operating Costs
4.1.1 Non-Operating Cost
4.1.2 Operating Cost
4.2 Concept of Cost Escapability
5 Determinants of Costs
5.1 Controllability of Costs
5.2 Break-Even Load Factor
5.3 Total Operating Cost and Unit Cost
5.4 Influence of Demand
5.5 Externally Determined Input Costs
5.5.1 Fuel Prices
5.5.2 Airport and En-Route Charges
5.6 Cost of Labour
5.7 Aircraft Type and Attributes
5.8. Network Characteristics
5.9 Economies of Scale, Density and Scope
6 Conclusions
List of References
- Quote paper
- Manuel Jacoby (Author), 2019, Air Carriers. Competitive Indicators and Drivers of the German Domestic Aviation Market, Munich, GRIN Verlag, https://www.grin.com/document/985629
-
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X.