US ATA relaunches cost index

1st Nov 2006

Air Transport Association of America (ATA), the industry trade organization representing leading U.S. airlines, today announced the re-launch of its longstanding quarterly Airline Cost Index. The latest release of this unique index incorporates data through the second quarter of 2006, and now includes more data from U.S. Department of Transportation (DOT) reports.

The ATA Airline Cost Index is the only industry analysis of its kind, tracking quarterly and annual trends in the cost of inputs to airline production. The latest version of the index has been overhauled to include all U.S. passenger airlines that report data to the DOT. In addition, a significant portion of expenses, previously labeled as “other,” have been segmented into “transport-related expenses,” which have grown substantially and consistently since the late 1990s. This category comprises payments by mainline carriers to their regional partners to transport passengers and cargo on their behalf. Other new features include: cost ratios re-indexed to the year 2000, recalibrated charts and graphs and reformatted individual cost pages.


The index facilitates comparisons between the components themselves as well as broader economic indicators. Key ratios emanating from the Airline Cost Index include: fuel efficiency, workforce productivity, average labor cost, break-even load factor and travel agency commission rates. Year-over-year highlights from the latest cost index include:



The composite cost index rose to 180.4, up 17.4 percent, compared to a 4.0 percent rise in the Consumer Price Index
The three largest cost components were fuel (25.5 percent), labor (23.8 percent) and transport-related expenses (14.7 percent)
Fuel prices paid increased 31.1 percent, from $1.51 to $1.97 per gallon. Meanwhile, average fuel efficiency rose to 50.5 revenue passenger miles per gallon and 61.7 available seat miles per gallon
The average cost of employing a full-time equivalent worker dropped $248 to $72,301
Factoring in changes in productivity and efficiency, the overall unit operating cost per available seat mile rose 6.3 percent, from 11.82 cents to 12.56 cents
The average break-even load factor dropped 3.4 points to 76.7 percent

ATA airline members transport more than 90 percent of all U.S. airline passenger and cargo traffic.


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