Understanding Fixed and Direct Charges Can Prevent Surprises
An excerpt from the article written by William Quinn for the Business Aviation Advisor Magazine July/August 2014
When The Numbers Don’t Make Sense
When the numbers don’t add up, there are three possible reasons:
- Budgeted figures did not accurately forecast proposed use,
- Annual utilization was greater or lesser than projections, and/or
- Fixed or direct costs were greater than anticipated, possibly due to new regulatory mandates or unscheduled maintenance.
Discipline and perseverance are required. The more prominent cost drivers are fuel and maintenance, which can total between 52% and 72% of the aircraft operating cost. For a pre-owned aircraft, maintenance costs can increase dramatically, representing as much as 50%-60%of the cost to operate the aircraft.
Read the full article Manage Your Aircraft Operating Costs_Quinn 07.2014