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of that particular operation and covering overhead. Competitive
pricing in the market also needs to be taken into account to determine
whether it makes sense to do a particular transaction or not.
• Guaranteed monthly minimum hours is essential if an aircraft
is to be committed.
• Pricing needs to be adjusted to account for changes in the
operation from that originally contracted, and needs to escalate
annually to cover standard increases in underlying costs. As much
as possible, dollar amounts for adjustments should be specified
in the ACMI agreement.
Aircraft Costs
• These generally comprise, debt, depreciation, and/or lease
payments. In some respects they are what they are, but it’s
critical that they be no more than market at the time the deals
are done and that things like maintenance reserve payments accurately
reflect the expected cost of the underlying maintenance..
Crew Costs
Key indicators are:
• Number of crews/crewmembers per aircraft.
• Hours paid divided by hours flown.
• Overtime hours per employee.
• Number of employees flying below contractual minimums and
number flying above (are we paying overtime, but underutilizing
other
people).
• Travel and living costs per employee.
• Comparisons with competitors’ costs where available.
Maintenance Costs
Key indicators are:
• Number of maintenance personnel per aircraft.
• Overtime hours per employee.
• Travel and living costs per employee.
• Third party maintenance cost per aircraft.
• Parts cost per aircraft and per hour flown.
• Total maintenance cost per aircraft and per hour flown.
• Downtime attributable to scheduled maintenance.
• Downtime attributable to unscheduled maintenance.
• Comparisons with competitors’ costs where available.
Overhead Costs
Key indicators are:
• Cost per aircraft, cost per block hour, and cost as a percentage
of revenue.
• Travel and living cost per employee.
• Comparisons with competitors’ costs where available.
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