Re: Operating Costs of Modern Aircraft

From:         kls@ohare.Chicago.com (Karl Swartz)
Organization: Chicago Software Works
Date:         07 Feb 93 02:02:44 PST
References:   1
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Peter J. Hicks asks:
>What are  the operating costs of Modern Aircraft ?

(Question about whether 757 or 767 at 49 pounds for a Manchester to
Lyon round-trip can turn a profit.)

Aviation Week and Space Technology (aka AW&ST aka AvLeak) occasionally
has a small section on operating expenses on the Airline Observer page.
I don't have numbers on the 757 handy but do have them for 767s, from
the August 24, 1992 issue (p. 15):

           Boeing 767-200/300 Airraft Operating Expense
                  12 Months Ended December 1991

		Cost/Blk Hr    Cost/ASM      %Chg by Category
		------------  ----------   --------------------
    Carrier	 ($)   %Chg    (c)  %Chg   Crew    Fuel   Maint
    ------------------------------------------------------------
    767-200
    American	2,936   0.4   3.64  (1.4)   7.5    (3.9)   (2.7)
    Delta	2,834  (5.8)  3.57  (7.5)   2.7   (16.3)   11.1
    TWA		2,987   1.4   3.70   0.8    9.9   (11.1)  (41.1)
    United	3,215   2.8   3.83   4.1    8.9   (11.0)   18.4
    USAir	3,213  (4.9)  3.39  (4.5)   7.5   (13.3)  (10.7)

    AVERAGE	3,021  (0.2)  3.64  (1.6)   8.1    (9.8)   (2.0)

    767-300
    American	3,367   5.0   3.44   5.5   (2.0)   (9.5)   72.3
    Delta	3,557   2.6   3.58   0.3    9.0   (14.7)   10.8

    AVERAGE	3,486   4.6   3.53   3.5    6.3   (13.1)   35.5

Call it 2,000 miles for the round-trip.  Using the average 767-300
cost per ASM (Available Seat Mile) that's about US$70.60 for the
aircraft operating expenses, or at the current exchange rate of about
US$1.50 to the pound it comes to 47 pounds per seat.  That leaves 2
pounds left for ground expenses, capital costs, and profit.  (Not a
lot of profit in that endeavour!)

Keep in mind, though, that these figures are for U.S. trunk carriers.
The fares you saw are probably for some charter operator or some such
which may have lower labor rates and almost surely packs in more seats.
If they're using a 757 I'd expect that to be cheaper, too.

Perhaps the biggest factor, though, is that not *all* the seats are
likely to be available at that price.  Airlines usually operate with
a break-even point somewhere in the neighborhood of 60% capacity.
Once they hit this point, another seat sold only needs to pay for the
ground expenses, additional fuel for an extra 180 lbs. of payload,
and a bag of peanuts and can of pop.  Beyond that is profit.

--
Karl Swartz	|INet	kls@ditka.chicago.com		
1-415/854-3409	|UUCP	uunet!decwrl!ditka!kls
		|Snail	2144 Sand Hill Rd., Menlo Park CA 94025, USA
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