getting to grips with the cost index(7)

Figure 3 provides a practical curve for obtaining cost indices based on specific knowledge of Time and Fuel Cost.
Figure 3. Cost index calculation

3.4 Basic options with the cost index concept
If an airline decides to adopt genuine cost index flight management, two possibilities exist :
- specific airline cost analyses can be performed, route and aircraft specific, tailored to the network and its operating and economic environment which the airline may know better than anybody else,
- aggregate approximations can be performed, bundling routes in low/medium/high fuel-and time-cost brackets (or the like), which the airline may decide to adopt as the most pragmatic approach.
We call these the Calculated Cost Index Option.
As will be reviewed in the next chapter, airlines should at least determine their average cost indices, possibly categorizing these in one way or another and periodically review these in order to alleviate trip cost penalties that could be incurred with inappropriate values. Periodic reviews should consider both fuel- and time-related costs.
If the company cost index is not known and the airline is not keen to calculate it, a Default Cost Index can be assessed using the FCOM for the A300-600/A310 and depending on the operational objective (e.g. optimum Mach, LRC or any Mach Number). This option is presently not available for the other models and we therefore refer to Appendix 2 for a detailed outline on this approach.

4. TRIP COST PENALTY AS A FUNCTION OF THE COST INDEX
As shown in 2.1, trip cost varies according to fuel-related costs on the one hand, and to time-related costs on the other.
The purpose of this section is to explain the sensitivity of the actual trip cost, firstly to errors in cost index which result from uncertainty as to the correct value of time-related costs, and secondly due to unaccounted fuel price fluctuations.
4.1 Trip cost variations at fixed fuel cost
A trip cost penalty may occur when the calculated cost index calls for a fast speed schedule, resulting in an increased fuel burn which is not offset by reduced time cost.
Alternatively, a trip cost penalty may occur when the calculated cost index calls for too slow a speed schedule, resulting in an increased time cost which is not offset by the reduced fuel burn (see the following Figures 4 - 10 . Trip cost=f(CI)).
Figure 4. .
 Trip cost = f(CI)
A300/A310(All models)

Figure 5. .
 Trip cost = f(CI)
A319/A320/A321(All models)

Figure 6. .
 Trip cost = f(CI)
A340
(All models)

Obviously, we can see that the higher the time-related cost, the higher the cost index corresponding to the minimum trip cost (different minima for each time cost value).
For the flat areas of these preceding curves, trip cost penalties are negligible when cost of time errors are made. We call these the "least risk areas". As depicted, trip cost penalties are marginal when the utilized cost index values are close to the theoretically correct ones. Elsewhere, trip cost penalties are rather sensitive.
　
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