Expenses and Costs

Airline Industry
Name
University Affiliation
Airline Industry
The airline industry provides services all around the world. It has a significant impact on the world's economy regarding its operations and its effects on the other industries such as tourism. The airline industry’s costs and expenses are determined by the expense of work, class of the aircrafts, and the typical procedures in an airport. The operating costs are the major costs in the air industry.
The aircraft direct operating costs account for 51% of the total expenses (Belobaba, Odoni, & Barnhart, 2015). The major costs in this category are labor and fuel. Due to the increase in fuel prices over the years, fuel is represented by 32.3% of the total operating cost. (International Air Transport Association, 2010). The share was 12% in the early 2000’s, but has more than doubled since that time. The fuel prices have slightly declined in 2015.
The labor cost is another significant expense. The workers include pilots, flight attendants, baggage handlers, dispatchers, customer service among others. Over the years, the labor costs have declined to cut down on the expenditure and as a result of more efficient skills among the workers (International Air Transport Association, 2010).
There is the maintenance cost that involves upkeep and repairing of aircrafts. There are also depreciation and amortization expenses. Services given to passengers in form of drinks and food are also a cost to the industry. Advertiseme...