Revisiting Cost Index - The Challenge of Calculating a Precise Figure for Brazilian Airliners

Abstract

Verbatim from Embry-Riddle Scholarly Commons. Not paraphrased, not summarized.

Within numerous possibilities, Cost Index (CI) is the tool that can provide economic speeds and deliver the lowest cost for a given flight. Cost Index is a highly volatile number that shifts its optimum value in several different circumstances. Through the analysis of the Brazilian regulation, operation and infrastructure reality, this paper reviews several influencers that can interfere with the optimum CI value for a specific flight, aiming for maximum precision and economy. A structured questionnaire was submitted to pilots from four of the biggest Brazilian airliners operating under part 121. The purpose of this questionnaire was to investigate whether a shift in the influencers that altered the optimum CI would also shift the actual CI. Given that companies must cope with a number of constraints which create a gap between the optimum and actual CI, this work analyses the extension of such gap by observing the number of influencers considered on the CI calculations of Brazilian airliners and identifying reasons that prevent companies from taking full advantage of this powerful tool. Brazilian airlines struggle to deal with time costs influencers due to difficulties in obtaining and threating precise data, especially when there are small shifts on the optimum CI. Some aspects of CI calculation were overlooked due to cultural and economic aspects associated with the cost of jet fuel. It is yet to be determined witch tools and methods that increase CI precision will be economically viable to Brazilian airliners.

Authors

• de Albuquerque d'Orey, Joaquim Pedro Embry-Riddle Aeronautical University
• da Silveira, Guilherme Amaral Embry-Riddle Aeronautical University

Keywords

• Cost Index
• Brazilian Airliners
• Influencers
• Cost Index Calculation
• Volatile
• Performance
• Economy
• Business Administration, Management, and Operations
• Management and Operations