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American Airline  Cost and Productivity Analysis American Airline  Cost and Productivity Analysis

American Airline Cost and Productivity Analysis - PowerPoint Presentation

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American Airline Cost and Productivity Analysis - PPT Presentation

Samira Monshi Question 3 American is a Network Legacy CarrierNLC It is operating large hubandspoke networks It is covering regional domestic and international services Has different types ID: 753783

cost fuel asm total fuel cost total asm operating revenue flown prices airline rpm flight 2008 increase chart question

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Slide1

American Airline Cost and Productivity Analysis

Samira

MonshiSlide2

Question 3

American is a

Network Legacy Carrier(NLC

)

It is operating large hub-and-spoke networks.

It is covering regional, domestic and international services.

Has different types

of

aircraft

Has

premium

class

Has labor unionsSlide3

Question 2

RPM

One paid passenger flown one mile.

i

(

Number of Passengers (Flight

i

) * Distance

Flown

(Flight

i

)

ASMs

One aircraft seat flown 1 mile.

i

(Number of

seats

(Flight

i

) * Distance Flown (Flight

i

)

RASM (Unit Revenue)

Total revenue/ASM

CASM (Unit Cost)

Total operating cost/ ASM

Yield

Average Fare paid by passenger per mile flown. Total revenue/ RPM

PRASM

total passenger revenue/ASM

Fuel Consumed

Total amount of fuel used per block hour

Fuel Costs per ASM

Total fuel cost /ASM

Non-Fuel Costs per ASM:

(Total Expenses-fuel cost)/ASMSlide4

RSM and Load factor increase and decrease with oscillation of ASM.

If the airline increases the ASM demands (RPM) is also increasing.

ASM, RPM and Load Factor increase in Q2 and Q3 each year.Slide5

Total revenue and total operating cost have the same pattern.

From 2002 Revenue and Operating Cost increase.

Income before taxes is unpredictable.Slide6

During 2003-2005 Revenue decreases that leads to decreasing in RASM and PRAZM.

CASM has bean oscillating with substantially large peaks in 2001 and 2008. Slide7

Fuel Cost starts increasing from 2002 and reaches to the max amount in 2008.

Non- fuel has the same behavior. ( probably influenced by fuel cost)

Fuel consumption decrees gradually.Slide8

As Jet Fuel Prices and cost per ASM are oscillating in the same pattern with a max peak in 2008

Non- fuel Costs is also influenced by 2008 recession.Slide9

Question 4

a

.

Fuel Prices on Expenses

(Chart 5, 4, 3

)

Fuel price can affect the total operating cost directly and Non- operating cost indirectly.

b.

Fuel prices on Airline

Finance

(Chart 2

)

It has influence on the total operating cost that lead to changes in income before tax.

c

.

Fuel Prices on Airline

Network Structure

(Chart

1)

High fuel price leads airlines to increase their Load factors in order to make sure they do not use fuel for an empty seat.