Chapter: 11. Direct Operating Costs

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Chapter: 11. Direct Operating Costs

11.01 Available Cost Methods

Direct Operating Cost (DOC) is a rather elastic concept. For obvious reasons, different airframe/engine manufacturers and airline operators tend to use different definitions. Piano provides enough flexibility and adjustments to cater for the most likely approaches. Use the 'Costs' item (keyboard equivalent Command-K, see 'Report' menu) to produce a DOC report corresponding to the design range, or tick the appropriate boxes in 'Mission @Mass...' and 'Mission @Range...' for the off-design cases. It is generally acknowledged that the results of DOC methods may be questioned in terms of their precise magnitude, but can, within reason, be used to make relative comparisons between designs.

To start with, you can pick one of the 'built-in' methods via the parameter cost-method . There are two basic options:

- The 'AEA' method, based on long-established procedures of the Association of European Airlines (1989 release), which comes in two varieties, 'medium range' and 'long range'.

- The 'Piano97' method, as previously used by a major airframe company for project analysis. This comes in four versions, 'short', 'medium', 'long' and 'ultra-long' range. It will be referred to as the 'P97' method.

Nominally, the built-in DOC methods apply to the following ranges:

AEA-medium/long  - Not specified
P97-short        - Up to approx. 3000nm
P97-medium       - From 3000 to approx. 5500nm
P97-long         - From 5500 to approx. 6500nm
P97-ultra-long   - Above approx. 6500nm
However, it is entirely up to the user to decide which method is appropriate. There is no automatic connection between the choice of method and Piano's range calculations.

Sample DOC Report

  Prices, millions of U.S.$ 

  Airframe                  21.72
  Engines                    5.56
  Aircraft Delivery Price   27.28 

  Costing method: aea-89-medium-range
  Operating Costs       U.S.$/trip    % of total
  Depreciation             3914.       14.47
  Interest                 3036.       11.23
  Insurance                 267.        0.99

  Flight Crew              3378.       12.49
  Cabin Crew               2769.       10.24
  Landing Fees              573.        2.12
  Navigation               3222.       11.91
  Ground handling          1365.        5.05

  Fuel                     4876.       18.03   {0.954 $/} 

  Airframe Maintenance     2465.        9.12
  Engines Maintenance      1177.        4.35

  Total Ownership          7217.    U.S.$ per trip
  Total Cash              19826.    U.S.$ per trip
  Total D.O.C.            27043.    U.S.$ per trip

  Utilization             511       trips/year
  Block time              6.84      hours
  Block distance          2870.     n.miles
  Block fuel              34129.    lb.
  Block fuel/seat         228.      lb./seat
  D.O.C./ block hour      3955.     U.S.$/hr
  D.O.C./ seat            180.      U.S.$/seat
  D.O.C./ seat-n.mile     0.06282   U.S.$/seat-n.mile

11.02 Adjusting the Cost Methods

You can effectively 'program-in' your own version of a DOC method by specifying the values of certain 'calculable' parameters. Initial values for these are assigned according to your choice of cost-method . It is possible to override some or all of them. The relevant 'calculable' parameters are:


In addition, the following 'defaulted' parameters can be adjusted:


All of these parameters are listed in the 'Operating Cost' palette. It is recommended that you use the 'Save Values As...' feature of the palette (see Chapter#08section04 ) to save your settings, so you can load them again later as required.

Source codes: The complete AEA method as implemented in Piano is covered by the procedure find-cost-aea . The P97 method is implemented by find-cost-piano97 .

11.03 Airframe and Engine Prices

The price of the airframe is independent of the method and is calculated from:

airframe-fixed-price-$ + ( airframe-$/mass * airframe mass)

These parameters can be used in combination to give any linear variation of price with airframe mass, or to fix the price altogether. By default, the airframe-fixed-price-$ = 0 and airframe-$/mass = 700 $/kg (317 $/lb). Note that the airframe mass is the sum of the basic structure mass and the fixed equipment mass (it is also equal to the MEW minus the powerplants and manufacturer's contingency, if any).

Similarly, the price of one engine is given by:

engine-fixed-price-$ + ( engine-$/thrust * reference-thrust-per-engine )

where the engine-fixed-price-$ defaults to 0 and engine-$/thrust defaults to 25$/newton (111 $/lbf). Aircraft delivery price will then be the sum of the airframe and the price of all engines.

11.04 Depreciation, Interest, Insurance

Total investment includes factors on the airframe and engine prices to allow for spares. AEA uses 1.1 and 1.3 respectively, P97 uses 1.06 and 1.25. This investment depreciates over a period given by amortization-years to a residual-value-fraction . By default, the amortization periods are: AEA-medium = 14, AEA-long = 16, P97 = 10, and the residual fraction is 0.1. Depreciation is spread over each flight according to the utilization (trips/year), which varies with the block time in a way specific to each method. However, you can supply your own definition of utilization via the parameter utilization-coeffs .

Interest repayments are calculated according to the interest-rate from first principles assuming annual repayments and distributed over the amortization period.

Insurance repayments are based on the aircraft delivery price and calculated from the insurance-rate .

Depreciation, interest, and insurance together constitute the 'Ownership' cost. The remaining elements make up the 'Cash' DOC. You can calculate Cash DOC alone by setting all the airframe and engine price-related parameters to zero.

11.05 Crew Salaries

AEA-medium and AEA-long use different fixed salary rates in $/hr, whilst each version of P97 calculates a salary as a function of the MTOW, number of crew, and utilization. You can override all methods by specifying the flight-crew-$/hr and cabin-crew-$/hr .

11.06 Landing, Navigation, Ground Fees

Landing fees are proportional to the MTOW and can be adjusted via landing-rate .

Navigation charges appear to follow the general form:

Navigation cost = k * (block distance) * (MTOW ^ 0.5)

You can adjust the constant k via the parameter navigation-rate .

Ground handling charges are assumed to be proportional to the payload mass and can be set via the ground-handling-rate . However, the P97 method uses zero by default.

Note that in the USA, landing, navigation, and ground handling fees are all usually omitted from DOC calculations (set the above parameters to zero).

11.07 Fuel Costs

These are found from the calculated block fuel burn and the fuel-price-$/vol .

11.08 Airframe Maintenance

AEA calculates this cost in terms of the airframe mass, whereas each version of P97 uses its own correlation with the OEW and number of pax. They can all be adjusted via the labor rate, labor-$/hr . Alternatively, you can specify any form of (linear) variation for the airframe maintenance cost in terms of block time, OEW and number of pax via the parameter airframe-maintenance-coeffs .

11.09 Engines Maintenance

For turbofans, both AEA and P97 use complex models which allow for the reference-thrust-per-engine but also include the effects of several engine cycle-related parameters, namely bypass-ratio , engine-pressure-ratio , number-of-shafts and number-of-compressor-stages . These methods can be adjusted via the labor rate, labor-$/hr . For turboprops, there are few reliable data and a simple correlation with reference-thrust-per-engine is used (of airline origin), which assumes a typical value of 2.6 lbf of static thrust per SHP.

Alternatively, you can specify any form of (linear) variation of the engine maintenance cost in terms of block time, thrust, bypass ratio, number of shafts, number of compressor stages, and pressure ratio via the parameter engine-maintenance-coeffs .

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