Costs - fixed and variable - examples
Full service or low cost airlines
All airlines, as with any other business, try to maximise income and minimise costs.
As was seen earlier, airlines have very high fixed costs. Let's look at this in more detail. We will compare full service national operators such as Lufthansa with the low cost firms, such as Ryanair. What are the costs that are incurred for a flight?
|Full cost||Low cost|
|Cost of the AEROPLANE||FC||FC|
|FUEL COSTS - empty of passengers||FC||FC|
|FUEL COSTS - as load increases||VC||VC|
|Commission to travel agents||VC||None|