A4A Quarterly Passenger Airline Cost Index: U.S. Passenger Airlines
08-Jul-2016 A4A produces the U.S. PassengerThe total number of revenue passengers boarding aircraft in scheduled service....Continue Reading | Full Glossary Airline Cost Index (PACI) to monitor trends in the cost of inputs (e.g., labor, fuel, food, aircraft ownership, airport landing fees, insurance, utilities, interest) to the provision of air service over time. The various indices also facilitate comparisons among the components themselves and between airline costs and broader economic indicators. Long-term cost trends are important determinants of airfares. While the PACI includes cost per available seat mile (CASM), the traditional measure of airline unit operating costs, the index values themselves are the superior bellwethers of the price of inputs to production. CASM can mask the true cost of an input because it also reflects changes in productivity over time.
The vast majority of the Cost Index is derived from quarterly financial and operational information collected by DOT (principally Form 41 reports), and historical data may be restated as warranted. Neither the Cost Index nor its components are seasonally adjusted because 1) users may find seasonal fluctuations of great interest and 2) leaving the data unfettered allows users to impose adjustments of their own choosing. Consequently, quarter-to-quarter movements in certain indices may be driven in part by the seasonality of the variables used to compute them.
A4A publishes the Cost Index and restates prior quarters as data becomes available from DOT. It reflects all U.S. passenger airlines filing complete reports for the corresponding quarter. In addition to the summary below, you can purchase and download the latest detailed Cost Index Tables (Excel) and Charts. For a sample table, please click here.
[Note: We have recently retooled the dataset going back to 1977. To be included in the cost index, carriers must have met the following criteria on an annual basis: 1) must report both passenger revenue and RPMs and 2) passenger revenue must be greater than or equal to 25% of total operating revenue. Data prior to 1977 excludes airlines with annual revenues less than $100 million. Results for a given quarter are typically available within 120 days of its completion. A detailed methodology can be obtained here.]
| A4A U.S. Passenger Airline Cost Index (PACI): 1Q 2016 | Index (2000=100) | % of Operating Expenses |
| LABOR per full-time equivalent employee | 174.2 | 33.1 |
| FUEL per gallon | 148.5 | 13.9 |
| AIRCRAFT RENTS & OWNERSHIP per operating seat | 97.6 | 8.0 |
| NON-AIRCRAFT RENTS & OWNERSHIP per enplanement | 109.0 | 4.6 |
| PROFESSIONAL SERVICES per available seat mile | 122.6 | 8.8 |
| FOOD & BEVERAGE per revenue passenger mile | 61.6 | 1.6 |
| LANDING FEES per capacity ton landed | 166.8 | 2.1 |
| MAINTENANCE MATERIAL per aircraft block hour | 94.6 | 1.9 |
| AIRCRAFT INSURANCE as % of hull net book value | 66.2 | 0.1 |
| NON-AIRCRAFT INSURANCE per revenue passenger mile | 90.6 | 0.2 |
| PASSENGER COMMISSIONS as % of passenger revenue | 20.1 | 0.9 |
| COMMUNICATION per enplanement | 69.3 | 0.9 |
| ADVERTISING & PROMOTION per revenue passenger mile | 55.8 | 0.7 |
| UTILITIES & OFFICE SUPPLIES per full-time equivalent employee | 130.1 | 0.8 |
| TRANSPORT-RELATED per regional carrier available seat mile | 163.5 | 12.7 |
| EMPLOYEE BUSINESS per full-time equivalent employee | 171.2 | 2.1 |
| OTHER OPERATING per revenue ton mile | 159.5 | 7.8 |
| TOTAL OP. EXPENSES | nmf | 100.0 |
| INTEREST* as % of outstanding debt | 79.3 | nmf |
| PACI: COMPOSITE (PRETAX) EXPENSES* | 143.1 |
*Although interest is a non-operating expense, it is factored into the composite cost index to capture the role of debt in the provision of air service. It is not included in the composite cost per ASM or share of operating expenses.