CARRIER COSTS AND DEMANDS AFFECTING TRANSPORTATION SERVICE PRICES

By Staff -- Logistics Management, 1/1/2001

Airline Services

Air carriers continue to push through fuel surcharges and price hikes. As a result of the recent escalation in fuel prices, the price for fueling services at airports jumped 17.0% over year-ago levels in November 2000. Jet fuel prices aside, aircargo carriers have been facing a slew of other cost increases, too. For example, the average price for maintenance and repair services at airports is up 5.1%, while the price for hangar and tie-down services has risen 3.0%.

Aircraft

Prices for aircraft and engine parts have begun to soar: The average price for complete civilian aircraft rose 6.9% between November 1999 and November 2000. Overall, average prices for all products made by domestic aircraft producers increased 4.4% in the same period. Meanwhile, direct manufacturing costs for aircraft have been rising at a slower 1.8% rate, which means aircraft producers have room to drop prices without harming their margins.