US flier costs rise by 11% in first quarter

The Air Transport Association of America (ATA), the industry trade organization representing leading U.S. airlines, today released its quarterly Airline Cost Index. The latest release of this unique index incorporates data through the first quarter of 2007.“Costs of running an airline continue to rise, more than 10 percent in the first quarter, driven primarily by a 12.6 percent cost surge in fuel,” said ATA vice president and chief economist John Heimlich. “Fortunately, airlines were able to compensate with a 16.7 percent improvement in fuel efficiency and continued vigilance on other controllable items.”

The composite cost index rose to 182.9, up 10.6 percent from the first quarter of 2006, compared to a 2.4 percent increase in the Consumer Price Index. The three largest cost components were labor (24.5 percent), fuel (23.4 percent) and transport-related expenses (13.9 percent).

Other year-over-year highlights are:

á    The average cost of employing a full-time equivalent worker fell $2,642 to $71,193

á    The average price paid for fuel increased 12.6 percent, from $1.83 to $2.06 per gallon; meanwhile, average fuel efficiency now exceeds 55 revenue passenger miles per gallon


á    Overall unit operating cost per available seat mile fell 3.8 percent, from 12.64 cents to 12.16 cents

á    The average break-even load factor dropped 4.3 points to 77.4 percent

á    Airlines experienced substantial year-over-year cost savings for maintenance/ material, advertising and promotion and other items