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Analysis of developments in the cost base of the airline industry.


Infrastructure Costs
Airlines and passengers are estimated to have paid at least US$92.3 billion for the use of airport and air navigation infrastructure globally in 2011, equivalent to 14.4% of the cost of transport.
Full report (pdf)

Airline Cost Performance
Cost efficiency is critical for an airline's ability to compete and survive. Yet not every airline should seek to be the lowest cost operator. There are still competitive advantages in an efficiently-delivered network model.
Summary report (pdf)
Full report (pdf)
Report update (pdf)

Airline Fuel & Labour Costs

Analysis of airline financial data to 2008 shows the trends in fuel and labour costs.  Fuel remains the largest cost category, with regional variation.
Full report (pdf)

The impact of the financial crisis on energy investment
by Dr Fatih Birol, Chief Economist, International Energy Agency
The financial crisis and following recession helped lower airline fuel costs compared to their highs of 12 months ago. The flip side of this equation is that energy investment has also declined with potentially serious consequences for future supply and fuel prices once demand recovers. New capacity of 45 million barrels per day are required annually just to offset declining capacity at existing fields.  
Full report (pdf)
Unions and wages in the US airline industry
by Barry Hirsch, Trinity University, San Antonio, Texas
US airlines have made significant progress in improving labour cost efficiency in recent years. However, there remains a wage premium for airline workers compared to similar skilled workers in other industries, particularly unionised workers. Attempts to limit pay increases as carriers regain financial health are necessary, but may not be achievable. A more hostile labour environment could arise, placing pressure on the overall health of US airline industry.
Full report (pdf)

Aircraft lessor prospects and lease valuation for airlines

by William Gibson, AirBusiness Academy
Over the medium term one of the primary stresses caused by the credit squeeze will be the capacity of operating lessors to finance deliveries. The operating leasing model involves the lessor accepting the risk of aircraft residual values, a risk which airlines pay for through higher funding costs implicit in the operating lease payments. This article by William Gibson considers different leasing valuation techniques which airlines can use to assess the risks and rewards of aircraft financing alternatives.
Complete report (pdf)



Additional information

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