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Circular 140
Regional Differences in Fares and Costs for International Scheduled Passenger Transport - 1976
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C l RCU LAR 140-AT145 .l CIRCULAR I REGIONAL DIFFERENCES 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 A viation Organization. A 11 correspondence, except orders and sub- scriptions, should be addressed to the Secretary General of ICAO, P.O. Box 400, Succursale Place de I'Aviation 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, Zamale k, Cairo. France. ertseitant de I'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, Mtxico 5, D.F. Pem. Representante de la OACI, Oficina SudamCrica, Apartado 4 127, Lima. Senegal. Repdsentant de I'OACI, Bureau Afrique, Boite postale 2356, Dakar. Spain. Libreria de Aeronkutica y Astronautics 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 I1 REGIONAL DIFFERENCES IN FARES AND COSTS Overall financial results by international route group ........ 3 Variations in revenue/cost ratios aroong carriers .............. 5 Comparison of results for 1976 with those for 1975 ............ 7 I11 FACTORS CAUSING REGIONAL DIFFERENCES IN COSTS Differences in aircraft mix and productivity .................. 9 Different prices for aircraft fuel and oil .................... 12 Differences in airport and associated charges ................. 14 Differences in load factor .................................... 14 Other causes of regional differences in costs ................. 15 Summary of causes of regional differences in costs ............ 17 IV POSSIBLE MEANS OF REDUCING REGIONAL DIFFERENCES IN FARES AND COSTS Reduction of cost differences ................................. 19 Reduction of differences in fare levels ....................... 20 APPEND1 CES 1 . Data Sources .................................................. 23 2 . Method of Analysis and Margins of Error ....................... 29 3 . Questionnaires Relating to Revenues and Costs ................. 33
I - INTRODUCTION 1. This Study of regional differences in the level of international passenger fares for scheduled services in 1976 and corresponding differences in the level of airline costs is the second to have been carried out pursuant to ICAO Assembly Resolution 21-26 Clauses lb ad ld. A first study in this series, covering the calendar year 19-75, was issued in March 1977 as ICAO Circular 131-AT/39. 2. The Special Air transport Conference in April 1977 examined Circular 131-AT/39 and concluded that the information provided by this first study was fundamental in establish- ing an objective basis against which to examine the fares machinery and its fares agreements. The Conference therefore formulated its Recommendation 18, calling on the ICAO Secretariat to further develop this work, and to seek to determine the main causes of regional differences in fares and costs as well as measures that might be taken to reduce such differences. The 22nd Session of the ICAO Assembly in September 1977 endorsed this Conference recomen- dati on. 3. For this second study, the method of analysis and presentation of results have been developed in accordance with the Special Air Transport Conference recommendation, while permitting year to year comparisons to be made with the results of the first study, Also, the level of accuracy and completeness of the results has been improved, partly as a result of methodology development, but mainly due to improved reporting of cost data for airlines. 4. Indications of the average fare per passenger-kilometre and the corresponding airline costs per passenger-kilometre for 17 international route groups, comprising all international routes, as well as information on the variation in revenue/cost ratios among carriers on the route groups, are presented in Chapter 11. Some of the factors causing regional differences in costs are examined in Chapter 111, and possible means of reducing such differences in Chapter IV. The sources of data used in the study are given in Appendix 1 together with information on the sample sizes on which revenue and cost data are based. The method of analysis of the data is presented in Appendix 2, together with the margins of error which should be borne in mind when considering the results of the study.
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