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Airline Operating Costs and Airline Productivity: Frontier Airlines. Danielle Hettmann SYST461 Homework Assignment. Chart 1: ASMs, RPMs, and Load Factor. Overall upward trend Load Factor and RPM have similar behavior ASM has transient behavior but is also apparent in RPM and Load Factor.

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airline operating costs and airline productivity frontier airlines

Airline Operating Costs and Airline Productivity: Frontier Airlines

Danielle Hettmann

SYST461 Homework Assignment

chart 1 asms rpms and load factor
Chart 1: ASMs, RPMs, and Load Factor
  • Overall upward trend
  • Load Factor and RPM have similar behavior
  • ASM has transient behavior but is also apparent in RPM and Load Factor
chart 2 income before taxes total operating expenses total operating revenue
Chart 2: Income Before Taxes, Total Operating Expenses, Total Operating Revenue
  • Total Operating Expenses and Income Before Taxes are inversely related
  • Total Operating Revenues and Total Operating Expenses have high correlation
chart 3 rasm casm yield per rpm prasm
Chart 3: RASM, CASM, Yield per RPM, PRASM
  • Strong outliers in 2009-Q2 for RASM and CASM
  • Very steady behavior in Yield per RPM and PRASM
chart 4 operating expenses
Chart 4: Operating Expenses
  • Overall, operating expenses are increasing
  • Spike in aircraft fuel operating expenses does not imply a spike in non-fuel operating expenses
chart 5 operating expenses
Chart 5: Operating Expenses
  • Correlation between increase in jet fuel price and aircraft fuel operating expenses per ASM
  • Non-fuel operating expenses are fairly constant per ASM but large changes can be attributed to large fluctuations in fuel prices and market response
analysis of fuel prices
Analysis of Fuel Prices
  • Effect on Expenses: Increase in fuel prices drives up operating expenses for airlines, causing the cost for ASM to increase
  • Effect on Airline Finance: Increase in fuel prices reduces the profit for airlines due to an increase in operating costs
  • Effect on Airline Network Structure: Increase in fuel prices causes yield to rise, meaning less aircraft flying but more people flying on each aircraft
sources
Sources
    • 1: http://www.frontierairlines.com/who-we-are/company-info/our-fleet
    • 2: http://www.frontierairlines.com/plan-book/routes-schedules/route-map
    • 3: http://www.afafrontier.org/?zone=/unionactive/view_page.cfm&page=About20AFA2DCWA
    • 4: http://www.frontierairlines.com/flight-info/seating-options
    • 5: http://www.frontierairlines.com/plan-book/fare-options
    • 6: http://www.frontierairlines.com/Home/flight-info
  • 7: http://www.frontierairlines.com/frequent-flyers/how-it-works
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