1. Economical factors in aviation Kpt. Ing. Michal BETKA Speaking Refresher for ATCs course 2013 1

2. 2 Vocabulary IATA - International Air Transport Association - is an international industry trade group of airlines headquartered in Montreal, Canada, where the ICAO is also headquartered. The executive offices are at the Geneva Airport, Switzerland. Aerial shipper - air transport company Workforce productivity - is the amount of goods and services that a worker produces in a given amount of time MTOW - maximum takeoff weight – weight of an aircraft is the maximum weight at which the pilot of the aircraft is allowed to attempt to take off, due to structural or other limits Hedging – purchase fuel by the fixed price for longer time interval 2

3. 3 Economical factors: basic – unable to influence - Economic growth - Interest rates - Exchange rates - Inflations rate secondary - able to influence – much more important - Energy costs - Personal costs - Charges (tax)

4. Aerial shipper costs (IATA 2004) 4

5. 5 A. Personal costs 25 – 35% total costs Great differences – (Europe up to 38%, Asia 18%) Base of personal costs: a)Income (Total company income : employee number) b)Workforce productivity – chosen parameter (passangers, persons per kilometer, profit, etc.) : employee number

6. Salary Greater  than base pay in each country differences between country: - pilots in EU 37%more than USA - board staff in EU up to 58% more than USA Workforce productivity - In USA 45% greater than EU From 1991 workforce productivity of european aerial companies is rising (AEA – Arlines European Association) – graph down 6

7. Rising workforce productivity of european aerial companies 7 Solution: increase workforce productivity, decrease personal costs

8. B. Fuel costs main book entry of total costs great changes of price  Up to 25% operating costs (80´s),  In these days 7,5%. 8

9. Solution: Fuel charge Hedging – purchase fuel by the fixed price Advantage – fixed price x disadvantage – loss ( price could be lower than actual exchange rate Tanking – purchase fuel at airport with low price of fuel Advantage – low price x disadvantage - refuel maximum amount Others – e. g. using modern technology 9

10. Charges Air navigation services charges (terminal navigation charges, charges for the use of en-route navigation services) Airport charges – (landing charges, noisy tax, parking tax etc.) in Europe 12 - 40€/ for departing passanger, for transfer 1/3, in USA 50 – 170 USD -almost connected with MTOW All charges are checked by Central Route Charges Office - Transparency - Simplicity - Effectivity - Low operating costs – high payback 10

11. Free of charge – MTOW  2 tons – SAR – flight for checking/verifying ground landing navigation aids – aircraft returning due to weather, mechanical or radio failure to the aerodrome of departure – flights of the Civil Aviation Authority Solution Optimalization – planning (direct route, not use route with heavy traffic, minimum of ground movement, using economic cruise level) 11

12. Fixed rate of route navigation services of members EUROCONTROL 12 AIC A 11/11 EURO

13. Distance factor for international flight 13

14. Thank you for attention Questions ? 14