Airline costs up 5 percent
U.S. passenger airlines faced a 5 percent composite cost increase during the third quarter of last year when compared to the same period in 2009, according to the Air Transport Association of America (ATA). During that same period, the Consumer Price Index grew by 1.2 percent.
Fuel, labor and payments to regional partners for cargo and passenger transport made up the largest percentage of the cost burden for carriers. Fuel and labor accounted for half of all operating expenses; fuel rose from a 2009 price of $1.92 per gallon to $2.13 per gallon, and the average cost of one full-time employee rose 5.6 percent. Other cost factors included advertising and promotion, which rose 12.8 percent, and landing fees, which increased by 3.8 percent.
A few items have declined in cost since the third quarter of 2009, according to the agency’s findings. Maintenance had decreased by 6.7 percent, and property rents and ownership were down 5.1 percent. Non-aircraft insurance costs had also decreased (3.8 percent).
ATA’s composite cost index is currently 110 percent higher than its 2000 total. John Heimlich, ATA’s chief economist, said monetary burdens will most likely continue to increase as long as the worldwide economy remains unstable.
"The third-quarter results highlight the continued importance of offsetting the rising costs of doing business through operational efficiencies, productivity gains, and diversification of revenue streams,” Heimlich said in a statement. “Thanks to a strengthening economy and the continuing efforts of airlines to adapt to a volatile environment, the increase in costs did not stand in the way of profitability this quarter."