Page 93 - Beginner's Guide to Aviation

AIRLINES' COST
What are some examples of what an airline spends money on? 1. Buying aircraft
FUN FACT:
Did you know that airlines will also suffer a cost that is known as Depreciation Cost.
Imagine this scenario: Buying a brand new phone now. After 5 years of using the new phone, the value of
the phone will decrease every year because it has been used and it is no longer new.
If you want to sell your phone after 5 years of using it, it will definitely be sold at a price lower than what you paid for when you first bought it. The difference between the price you paid for the phone at the start and the price you sold the phone for at the end is also known as the total depreciation cost.
It is the same concept towards aircraft!
2. Fuel (aircraft uses fuel to fly)
3. Maintenance (aircraft needs to be maintained and checked regularly to ensure safe operations)
4. Salaries (airline needs to pay its employees)
5. Others
(e.g. advertising, airport charges such as landing fees, operating expenses such as catering and in-flight service products, office rental)
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