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Circular 131
Regional Differences in Fares and Costs for International Scheduled Passenger Transport - 1975
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CIRCULAR CIRCULAR 131-AT139 I IN FARES AND COSTS FOR INTERNATIONAL SCHEDULED PASSENGER TRANSPORT Approved by the Secretary General ,and published under his authority INTERNATIONAL CIVIL AVIATION ORGANIZATION MONTREAL CANADA
Published in separate English, French, Spanish and Russian editions by the Inter- national Civil Aviation Organization. All correspondence, except orders and sub- scriptions, should be addressed to the Secretary General of ICAO, P.O. Box 400, Succursale Place de lilviation internationale, 1000 Sherbrooke Street West, Montreal, Quebec, Canada H3A 2R2. Orders for this publication should be sent to one of the following addresses, together with the appropriate remittance by bank draft or post office money order in U.S. dollars or the currency of the country in which the order is placed. International Civil Aviation Organization. Attention Distribution Officer, P.O. Box 400, Succursale Place de 1'Aviation internationale, 1000 Sherbrooke Street West, Montreal, Quebec, Canada H3A 2R2 Egypt Arab Republic of. ICAO Representative, Middle East and Eastern African Office, 16 Hassan Sabri, Zamalek, Cairo. France. Reprdsentant de l'OACI, Bureau Europe, 3bis, villa Emile-Bergerat, 92200 Neuilly-sur-Seine. India. Oxford Book and Stationery Co., Scindia House, New Delhi or 17 Park Street, Calcutta. Japan. Japan Civil Aviation Promotion Foundation, No. 38 Shiba Kotohira-Cho, Minato-Ku, Tokyo. Mexico. Representante de la OACI, Oficina Norteamtrica y Caribe, Apartado postal 5-377, Mdxico 5, D.F. Peru. Representante de la OACI, Oficina Sudamkrica, Apartado 41 27, Lima. Senegal. Reprdsentant de I'OACI, Bureau Afrique, Boite postale 2356, Dakar. Spain. Librerfa de Aeronhutica y Astroniutica Sumaas, Desengaiio, 12-30-3, Madrid 13. Sweden. C.E. Fritzes Kungl. Hovbokhandel, Fredsgatan 2, Box 16356, Stockholm 16. Thailand. ICAO Representative, Far East and Pacific Office, P.O. Box 614, Bangkok. United Kingdom. Civil Aviation Authority, Printing and Publications Services, Greville House, 37 Gratton Road, Cheltenham, Glos., GL50 2BN. Do you receive the ICAO BULLETIN The ICAO Bulletin contains a concise account of the activities of the Organization as well as articles of interest to the aeronautical world. The Bulletin will also keep you up to date on the latest ICAO publica- tions, their contents, amendments, supplements, corrigenda, and prices. Available in three separate editions English, French and Spanish. Annual subscription U.S.15.00 surface mail U.S.20.00 air mail.
TABLE OF CONTENTS INTRODUCTION Page 1 RESULTS 3 Regional differences in fares and costs .......................... 3 Variation in revenue/cost ratios among carriers .................. 5 Impact of aircraft types and stage lengths on costs .............. 7 DATA SOURCES General .......................................................... 9 The questionnaires ........................................ 9 METHOD OF ANALYSIS 13 ....................................................... Procedures 13 ................................................. Margins of error 14 APPENDICES ....................................... . 1 Assembly Resolution A21-26 17 2 . Questionnaire Relating to Revenues ............................... 19 3 . Questionnaire Relating to Costs .................................. 21 ........................................ 4 . Replies to Questionnaires 27
I - INTRODUCTION 1. This Study of regional differences in the level of international air passenger fares for scheduled services in 1975 and corresponding differences in the level of airline costs has been carried out pursuant to ICAO Assembly Resolution A21-26, Clauses 1 b and 1 d. This Assembly Resolution is reproduced in Appendix 1. 2. The financial statistics for international scheduled airlines which are available to ICAO through its regular statistical programme and published by the Organization for the benefit of its Contracting States provide, in addition to other information for each airline, data on the revenues received for all scheduled passenger transport as well as on the costs for the transport operations as a whole. The statistics do not provide a breakdown of costs or revenue by geographical area of operation. For this reason and because most international airlines operate in more than one geographical area, the published ICAO statistics only provide limited information ccncerning the relationship between the average passenger revenue yield fare level and the related airline costs per passenger-kilometre or seat-kilometre for particular geographical areas or groupings of international air routes. 3. Since both the general level of air fares and the level of operating costs vary between route groups, a situation where there is an overall balance between the airlines' passenger revenues and the costs of operating passenger services does not preclude that passengers on certain route groups may be paying excessively to make up for fare levels which are too low on other route groups. This question is very relevant to States when they approve new fares to and from their territories and accordingly the ICAO Assembly, in Resolution A21-26, Clause 1 b, directed the Council to undertake studies of this matter. A first study in this series has now been carried out and a summary of the results is presented for the information of States in this Circular. 4. For this first study the method of analysis has not been fully developed. It has also not been possible to obtain the required information from all the airlines that could have provided it. The level of accuracy and completeness of the first results is therefore not as high as it should be in the future. IIowever, the results reached pro- vide an indication, with an acceptable degree of accuracy, of the average fare per passenger-kilometre and the corresponding airline costs per passenger-kilometre for 15 international route groups, comprising all international routes except those within the Middle East area. These results are presented in the following Chapter.
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