Economical factors in aviation

Kpt. Ing. Michal BETKASpeaking Refresher for ATCs course

2013

11

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VocabularyIATA - International Air Transport Association - is an international industry

trade group of airlines headquartered in Montreal, Canada, where the ICAO is also headquartered. The executive offices are at the Geneva Airport, Switzerland.

Aerial shipper - air transport company

Workforce productivity - is the amount of goods and services that a worker produces in a given amount of time

MTOW - maximum takeoff weight – weight of an aircraft is the maximum weight at which the pilot of the aircraft is allowed to attempt to take off, due to structural or other limits

Hedging – purchase fuel by the fixed price for longer time interval

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Economical factors:

• basic – unable to influence- Economic growth- Interest rates- Exchange rates- Inflations rate

• secondary - able to influence – much more important- Energy costs- Personal costs- Charges (tax)

Aerial shipper costs (IATA 2004)

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15%

12%

8%

16%9%7%

12%

9%

5,6%7%

CostsGround handling

Crew

Passenger service

Ticketing+Promotion

Administrative

Fuel + Oil

Aircraft Cost

Maintanance

Traffic Services

Airport Services

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A. Personal costs

25 – 35% total costs

Great differences – (Europe up to 38%, Asia 18%)

Base of personal costs:

a) Income (Total company income : employee number)

b) Workforce productivity – chosen parameter (passangers, persons per kilometer, profit, etc.) : employee number

Salary

Greater than base pay in each country

differences between country:

- pilots in EU 37%more than USA

- board staff in EU up to 58% more than USA

Workforce productivity

- In USA 45% greater than EU

From 1991 workforce productivity of european aerial companies is rising (AEA – Arlines European Association) – graph down

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Rising workforce productivity of european aerial companies

020406080

100120140160180200

1990 1992 1994 1996 1998 2000 2002 2004

seat

-kilo

met

er /

empl

oyee

77

Solution: increase workforce productivity, decrease personal Solution: increase workforce productivity, decrease personal costscosts

B. Fuel costs

main book entry of total costs

great changes of price Up to 25% operating costs (80´s), In these days 7,5%.

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Solution:

Fuel charge

Hedging – purchase fuel by the fixed priceAdvantage – fixed price

x

disadvantage – loss ( price could be lower than actual exchange rate

Tanking – purchase fuel at airport with low price of fuel

Advantage – low price

x

disadvantage - refuel maximum amount

Others – e. g. using modern technology

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ChargesAir navigation services charges (terminal navigation charges, charges for the use of en-route navigation services)

Airport charges – (landing charges,

noisy tax, parking tax etc.) in Europe 12 - 40€/ for departing passanger, for transfer 1/3,

in USA 50 – 170 USD

-almost connected with MTOW

All charges are checked by Central Route Charges Office

- Transparency- Simplicity- Effectivity- Low operating costs – high payback

1010

Free of charge – MTOW 2 tons

– SAR

– flight for checking/verifying ground landing navigation aids

– aircraft returning due to weather, mechanical or radio failure to the aerodrome of departure

– flights of the Civil Aviation Authority

Solution

Optimalization

– planning (direct route, not use route with heavy traffic, minimum of ground movement, using economic cruise level)

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Fixed rate of route navigation services of members EUROCONTROL

99,27

79,6873,91 73,91 70

64,63 60,96

46,1536,56 36 33,06 30,22

0

20

40

60

80

100

120 Fixed rate

1212AIC A 11/11

Distance factor for international flight

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Thank you for attention

Questions ?

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