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Costs - fixed and variable - examples

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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
Crew costs FC FC
FUEL COSTS - empty of passengers FC FC
FUEL COSTS - as load increases VC VC
Catering costs FC VC
Landing charges FC FC
Handling charges FC FC
Ticketing costs FC FC
Commission to travel agents VC None