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Aviation History
1972
1972 - 2062.PDF
FLIGHT International, 10 August 1972 214-215 available in substantial detail. One of the valuable contri butions which the new CAA can bring to British aviation would be to ensure that such statistics are available from the British industry as well. The direct operating costs are recorded for all types of aircraft in service with United States air carriers. They need some adjustment to relate them, for comparison, to a specific medium-long sector such as London-New York. And they are, of course, by no means all the story—not even all the story of each aircraft type. A careful analysis of the published total costs of relevant airlines makes pos sible the completion of the picture on "indirect," or over head, costs applied to different types of aircraft for specific patterns of operation. An interesting background fact is that these overhead costs (for general services, administration and interest on long-term debts), for United States scheduled airlines as a whole, amounted in 1971 to $4-8 million on top of $5-3 million direct operating costs for a total of 47,224 million available capacity ton-miles flown. The pattern which emerges is that the United States scheduled air transport industry as a whole operates at a somewhat lower cost structure (and at a lower rate of revenue yield) than do British airlines when compared over similar distances and at similar rates of utilisation. There are of course wide variations between individual airlines with different route structures. Let us look at some of the raw material. Take the published averages of operating costs for the 707 and 747 at the stage in their service lives at which they stood towards the end of 1971. Since then, to be fair, the 747 has steadily improved. Relate these costs to medium/long- range international services, still in terms of United States standards. Then the chief categories of costs—in US dollars per block hour—are broadly as follows (at an average achieved rate of utilisation of 4,030hr per year for the 707 and at 4,140hr per year for the 747): ACTUAL OPERATING COSTS—1971 ($ per block-hour) 1 Flying operations (crews, fuel, oil, insurance 2 Direct maintenance (airframe, engines, flight equipment) 3 Depreciation and rental 4 Total direct operating costs per block-hour 5 Maintenance overhead 6 Total aircraft operating costs Indirect costs 7 Traffic & sales (including advertising and publicity) 8 Passenger service costs 9 Ground handling costs (including depreciation of ground equipment) .. 10 Administration & general overheads.. 11 Total overhead costs 12 Total costs per block hour 707 500 120 200 820 115 935 330 160 330 80 900 1,835 747 675 525 550 1,750 190 1,940 480 300 590 190 1,560 3,500 If we now relate these costs to the specific London-New York sector (on which the 707 has an average capacity of 148 passenger seats included in 22 tons of payload and the 747 an average of 358 passenger seats in 57 tons of payload, with sector fuel-loads, including reserves, of 144,0001b and 232,0001b respectively) the total costs work out at: — TOTAL COSTS (London-New York) 1 Per revenue aircraft n.m 2 Per passenger seat n.m 3 Per available capacity-ton-mile .. 4 Total costs for sector (3,050 n.m.) 707 $4.5 3.04c 20.4c 747 $8.6 2.40c 15.1c $13,750 $26,200 These statistics form the basis from which economic factors can be derived; for instance, the load factor required to break even at a one-way economy-class fare of $226—assuming 136 economy seats for the 707 (plus 12 first-class) and 331 for the 747 (plus 27 first-class), and assuming revenue from first-class passengers and cargo as a bonus. TO BREAK EVEN Economy-class passengers (at $226 each) Equivalent load factor 707 61 45% 747 116 35% One or two things have to be said about these figures. First, average costs based upon a single medium/long- range sector of this sort are inevitably (and fortunately) rather lower than the normal run of things, because the payload-range curves of the particular types of aircraft are well matched to such distances—much better than to the shorter average sector distances over which they normally operate throughout a complete route network. The beneficial influence of long range and high utilisation is only partly offset by the higher average costs of inter national services compared with domestic routes inside the USA. The total costs of some 20-4 cents and 15-1 cents per c.t.m. for the 707 and 747 on the westbound North Atlantic compare with the average of 21-4 cents per c.t.m. for the United States scheduled airline industry as a whole for 1971—over an average sector distance of only 415 n.m. at an average rate of utilisation of 2,390hr per year. They compare, too, with the 23-2 cents per c.t.m. of BOAC for 1970-71 for an average sector distance of 1,540 n.m. at 4,100hr per year utilisation. Secondly, the maintenance costs for the JT9Ds in the 747, for the particular period of the reported costs, were running at the high average level of around $387 a block hour. That works out at rather more than $2/1,0001b of static thrust for each block hour, which compares with less than $0-75/l,0001b for the JT3D in the 707. The later JT9D-7 engines now installed in the 747 appear to be returning figures as good as, or even better than, the earlier engines. In due course they seem likely to reduce the 747's total costs by perhaps $250 a block hour. A further point is that insurance rates for the 747 have been reduced dramatically as a result of current operating experience. With all that as a background—what about Concorde? Crew costs, fuel, oil and depreciation are straight forward from known data. One aspect—depreciation (at about $4 • 1 million a year per aircraft, including spares')— is obviously a heavy burden. Insurance, too, will presum ably be high (at—say—two per cent) until experience is gained. Airframe maintenance should be "on the line" for the size of aeroplane. But, to err towards caution, we may set the engine maintenance at a relatively high figure (at $308 a block hour, in proportion to the recent high figures for the 747) until experience shows otherwise—as one can, reasonably, hope that it will. There is no reason to expect general overheads asso ciated with the Concorde to be dissimilar from those for the 707 (which has more passenger capacity) except for interest on capital which will obviously be higher. From such an empirical, and I think realistic, basis, Concorde's likely operating costs per block hour on United States standards can be calculated with a fair degree of confidence—based on a utilisation of 4,100hr per annum (comparable with the rate being achieved with both the 707 and 747 today). ESTIMATED OPERATING COSTS (on 1971 values) ($ per block-hour) 1 Flying operations (crews, fuel, oil, insurance) 2 Direct maintenance (airframes, engines, flight equipment) 3 Depreciation & rentals 4 Total direct operating costs 5 Maintenance overhead 6 Total aircraft operating costs .. 7 Total overhead cost 8 Total costs per block hour Concord 1,130 420 1,000 2,550 150 2,700 say 1,100 3,800
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