CPA Costs up 13 Percent for Majors 

Capacity purchase payments rose 13.3 percent in the third quarter of 2007, according to the Air Transport Association, making it the third largest major airline cost behind fuel and labor. The organization also said that record load factors helped U.S. airlines offset 91 percent cost increase since 2000 but...

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Capacity purchase payments rose 13.3 percent in the third quarter of 2007, according to the Air Transport Association, making it the third largest major airline cost behind fuel and labor. The organization also said that record load factors helped U.S. airlines offset 91 percent cost increase since 2000 but the quarterly Airline Cost Index, now incorporating data through the third quarter of 2007, rose to 191.2 in the third quarter of last year, up 0.2 percent from the third quarter of 2006. This increase is in contrast to a 2.4 percent increase in the Consumer Price Index (CPI). The three largest components of the index – which includes all operating expenses as well as interest expense – were fuel (25.9 percent), labor (22.8 percent) and transport-related expenses or capacity purchase payments to regional carriers (13.3 percent).
Other year-over-year highlights include:
• The average price paid for fuel increased 1.6 percent to $2.11 per gallon
• The average cost of employing a full-time equivalent worker rose $709 to $76,423
• Airlines experienced a 15.3 percent jump in maintenance material costs, offset in part by a 16.4 percent decline in aircraft insurance costs and a 17.4 percent decline for other insurance costs
• Overall unit operating cost per available seat mile was unchanged at 12.49 cents
• The average break-even load factor (BELF) dropped 1.3 points to 76.6 percent
"The slowing economy and sky-high fuel prices are putting tremendous pressure on U.S. airlines to reduce non-fuel costs," said ATA Chief Economist John Heimlich. "Fortunately, in the third quarter, a record load factor of 83 percent helped U.S. airlines offset the 91 percent increase in costs they have seen since 2000."