Aircraft Operating Costs and Profitability

Camilleri, M. A. (2018). Aircraft Operating Costs and Profitability. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 12, pp. 191-204). Cham, Switzerland: Springer Nature.

16 Pages Posted: 17 Dec 2018

See all articles by Mark Anthony Camilleri

Mark Anthony Camilleri

University of Malta; University of Edinburgh

Date Written: December 1, 2017

Abstract

The airlines’ marketing policies are influenced by costs and expenses which could influence their levels of service, and their ability to be profitable. Their direct and indirect operating costs are affected by sector length; utilization of aircraft, fleet size and labor costs, among other issues. Moreover, the aircraft design characteristics, such as aircraft size, aircraft speed, age of the aircraft, crew complement could also affect the airlines’ cost structure. Furthermore, the airlines may have overheads, including; sales costs, administration, accounts, general management and employment costs, among others. Therefore, this chapter provides a detailed overview of airline operating costs and explains how to analyse their profitability. Initially, it introduces its readers to the airlines’ direct and indirect costs, as well as overheads. Afterwards, it deals with cost comparison parameters and metrics.

Keywords: airline, airline finance, airline costs, aircraft costs, airline direct costs, airline indirect costs, airline profitability, airline strategy

JEL Classification: M00, M1, M4, M40, M41, M10, M3, M30, Z3, Z30

Suggested Citation

Camilleri, Mark, Aircraft Operating Costs and Profitability (December 1, 2017). Camilleri, M. A. (2018). Aircraft Operating Costs and Profitability. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 12, pp. 191-204). Cham, Switzerland: Springer Nature.. Available at SSRN: https://ssrn.com/abstract=3289501

Mark Camilleri (Contact Author)

University of Malta ( email )

Department of Corporate Communication,
Faculty of Media and Knowledge Sciences
Msida, MSD2080
Malta
79314808 (Phone)

HOME PAGE: http://https://www.um.edu.mt/profile/markacamilleri

University of Edinburgh

27 Buccheluech Place,
The Business School
Edinburgh, Scotland EH8 9JS
United Kingdom

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