Discussion
Which of these is a fixed cost for an airline?
Answer: A
Correct answer: Aircraft depreciation
Depreciation is a fixed cost: the aircraft loses value with time whether it flies or stands on the ramp, and the charge is set by the acquisition price, the depreciation period and the residual value rather than by utilisation.
The other three are variable, accruing only when the aircraft operates - fuel burnt in flight, landing fees charged per movement, and maintenance labour driven by flight hours and cycles. The distinction is what makes utilisation so important: fixed costs per block hour fall as flying hours rise, while variable costs per hour do not.
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