Operating costs and capacity in the airline industry

Wen Hsien Tsai, Lopin Kuo

Research output: Contribution to journalArticlepeer-review

50 Scopus citations

Abstract

This study illustrates how to calculate accurate costs, including the operating costs for individual airplanes and flights, as well as the costs per available seat kilometers, and per available ton kilometers using activity based costing. It also identifies the main activity items and drivers of each airplane and flight. Additionally, it uses a case study to illustrate the calculation of production variance, marketing variance and expected idle passenger capacity in the airline industry. This is useful information when the purchase or lease an airplane under the conditions of idle capacity.

Original languageEnglish
Pages (from-to)269-275
Number of pages7
JournalJournal of Air Transport Management
Volume10
Issue number4
DOIs
StatePublished - Jul 2004

Keywords

  • Activity-based costing (ABC)
  • Airline industry
  • Idle passenger capacity
  • Operating costs

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