getting to grips with the cost index(4)

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In practice, these costs are commonly called marginal costs : they are incurred by an extra minute or an extra hour of flight.
In addition to the above time-related costs, extra cost may arise from overtime, passenger dissatisfaction, hubbing or missed connections. These costs are airline-specific. If an airline can establish good cost estimates, it is possible to draw a cost versus arrival time function and hence to derive a cost index.
Figure 1. Direct maintenance cost

With time-related costs, the faster the aircraft is flown, the more money is saved. This is because the faster the aircraft is flown, the more miles time-related components can be used and the more miles can be flown and produced between inspections when just considering maintenance cost. However, if the aircraft is flown faster to reduce timerelated costs, fuel burn increases and money will be lost in turn.
On the other hand, to avoid over-consumption of fuel, the aircraft should be flown more slowly. To solve this dilemma, the FMS uses both ingredients, and is therefore able to counterbalance these cost factors and to help select the best speed to fly, therefore called ECON (i.e. minimum cost) speed.

2.3 Cost index calculation
C
C =
Time
I CFuel
This mathematical expression is to be found as such or through an equivalent transform of respectively Sperry/Honeywell or Smiths Flight Management Systems. Whereas is scaled 0 to 999 on the first two, it is going from 0 to 99 on the latter.
Units are given in kg/min or alternatively as 100 Ib/h

scaled 0 to 99 or 999 (depending on FMS vendor)
Extreme cases :
1) CI = 0 or practically, when CT small, CF large or MINIMUM FUEL MODE for Maximum Range (MRC).
This is the case of greatest influence of fuel cost in the operating bill.
2) CI =MAX or practically, when CT large, CF small or MINIMUM TIME MODE for Maximum Speed (MMO -0.02 = M 0.82 for A300-600, A310, M 0.80 for A320 Family, M 0.84 for A330/A340).
The cost index effectively provides a flexible tool to control fuel burn and trip time between these two extremes. Knowledge of the airline cost structure and operating priorities is essential when aiming to optimize cost by trading increased trip fuel for reduced trip time or vice-versa.

The mere fact that fuel costs can significantly vary from one sector to another and throughout the year should prompt airlines to consider adopting different cost indices for their various routes, seasonally readjusted to account for recurring fluctuations.
At Airbus, the Customer Services Directorate runs a department specialized in evaluating and modelling direct maintenance costs. Much progress could be obtained by having airline accountants look into the other time-related costs also. In practice, however, it has been hard for flight operations departments to persuade their airline financial analysts into assessing marginal operating costs.
This is probably because the latter have not yet integrated the importance of the cost index itself, largely an unknown concept to their decision-makers. And, despite the fact that airline econometrics nowadays is a field in itself, worldwide statistics on the distri-bution of operating costs are currently as shown below.
　
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