AMERICAS: ATA reports 36% drop in Q3 cost index

The Air Transport Association of America (ATA) released its quarterly Airline Cost Index recently, incorporating data through the third quarter of 2009 with the composite cost index falling 36 per cent to 185.3 in the third quarter of 2009, versus 289.7 in the same period of 2008. This easily outpaced the 1.6 per cent decline […]


The Air Transport Association of America (ATA) released its quarterly Airline Cost Index recently, incorporating data through the third quarter of 2009 with the composite cost index falling 36 per cent to 185.3 in the third quarter of 2009, versus 289.7 in the same period of 2008. This easily outpaced the 1.6 per cent decline in the US Consumer Price Index (CPI). The three largest components of the index – which includes all operating expenses as well as interest expense – were labor, fuel and transport-related expenses, respectively.

“With heightened security measures in place, security costs looming, a fragile economic recovery and continued job losses reported by the Bureau of Labor Statistics within the past week, airlines remain intensely focused on reducing expenses and pursuing additional sources of revenue,” said ATA chief economist John Heimlich. “Cost discipline remains paramount amid historically weak demand for air travel and the return to US$80-plus crude oil.”

Heimlich added that recent unwarranted increases in the price of crude oil reinforce the need for Congress to pass financial market reforms to curb energy price volatility while regulatory authorities also take appropriate action.