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Identify and explain three Direct Operating Costs (DOCs)
Direct Operating Costs And Pricing
Length: 3 pages (935 Words)
Direct Operating Costs and Pricing
Airline costs are divided into direct operating costs and indirect operating costs. Direct operating costs are all costs associated with and dependent on the type of aircraft in operation and what would change if the aircraft changed. Direct operating costs that can be both fixed and variable are the flying expenses, which include depreciation, fuel costs, and maintenance costs. Example of variable costs is Fuel and crew. Manufacturers design the parts of an aircraft in such a way that the DOC is as low as possible. Estimating the operating costs airplane enables airplane manufacturer to assess economic suitability of an airplane on a certain route. Indirect operating costs remain unaffected by a change in aircraft and are not dependent on its operations (Holloway, 2008).