Dynamic model to calculate operating costs of passenger aircraft

Economics and management


Opryshko N. V.*, Opryshko Y. V.**, Ruban N. V.***

Moscow Aviation Institute (National Research University), 4, Volokolamskoe shosse, Moscow, А-80, GSP-3, 125993, Russia

*e-mail: hope_85@mail.ru
**e-mail: opryshko_yuliya@mail.ru
***e-mail: kaf505@mai.ru


One of the main indicators of competitiveness of an air carrier is the low cost of airline tickets subject to compliance with safety and comfort standards. An aircraft corporation, which is be able to offer the cheapest aircraft to operate, can force the competitors out of the market and strengthen its position in the global market of civil aircraft.
The cost per flight-hour is the criterion that takes basic operating costs of the using a passenger aircraft (airport charges, ownership, fuel per flight-hour, flight crew and cabin crew, aircraft maintenance) into account. This criterion does not consider the time factor, and this can lead to unacceptable errors in the comparison of aircrafts with different flight technical and economic characteristics.
Research objective is creating a dynamic model to calculate the cost per flight-hour passenger aircraft, taking a time factor and variability of environment into account.
We use methods of forecasting and time discount.
To calculate the hourly cost of aircraft ownership, we have to divide the amount of discounted lease payments of wet leasing into aircraft cumulative life; the received sum will reflect the hourly cost of aircraft carrier ownership.
If the lease agreement provides that the lessee bears the operating costs, it is necessary to divide labor-intensive characteristic of regular service with the annual indexation and target price of materials for repair, given the current moment of discounting cash flow, into the frequency of the work performance.
The cost of the flight crew including stewards is offered for calculation as a sum of wages and insurance contributions, indexed with allowances made for inflation and modified to current point in time, divided by the cumulative life of aircraft in hours.
To calculate cost of aviation fuel per flight-hour we have to determine the average cost of 1 ton of fuel for the entire statutory service life of the aircraft and bring it to the current point in time. The calculated expected average cost of fuel inclusive of the dynamics of change in the price will reflect the actual cost of fuel over the operating life of the aircraft.
For the distribution of airport charges per flight-hour, we propose to multiply the amount of expenses tо ensure takeoff and landing by the statistical or normative number of takeoffs and landings and divide into the cumulative life of aircraft in hours.
The suggested model is focused primarily on airline executives to support decision making in choosing the aircraft. However, the use of this model will allow managers of Aircraft Corporation to assess the real competitiveness of aircraft manufactured by the corporation and looking for methods and ways to improve it.
Resulting from the use of this model of the flight-hour cost is probabilistic in nature and has a certain level of uncertainty associated with projected value of indicators which are used in the model. However the accuracy of cost accounting in this case would be much higher than using a fixed value of cost of flight-hour.


civil aircraft, competitiveness, operating cost, cost of flight-hour, lease payments


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