Cost Index
12-24-2010, 07:35 PM
#21
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Joined APC: Dec 2009
Position: 350A
Posts: 425
captfurlough's comments are so true it is sad, lots of carriers are really wasting fuel. And fuel is getting expensive again! Millions of dollars are being wasted on fuel that could be spent on other things-- any mgmt pilots here listening? I think rarely is it worth it to use a CI above 50 even to maintain schedule integrity. You only end up waiting for a gate or dealing with slow handling on the ground. Furthermore look at the numbers: flying .02 mach faster can really increase fuel burn and will only save about 90 seconds per hour of flight time, .04 mach faster will really send fuel flows through the roof and will only save 3 minutes per hour flown above 10000'. I say Frontier is smart using a CI of 5.
12-25-2010, 03:48 AM
#22
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Joined APC: Jul 2008
Position: G550 & CL300 PIC
Posts: 369
This is the best info I've ever read on the CI constant.
Variable Cost Index - PPRuNe Forums
Changing the CI based on wind seems to defeat the purpose. The result of the CI formula is a mach/IAS that results in minimal cost given the current wind, weight, course, and aircraft costs. In a headwind the CI result will be a higher speed, in a tailwind, it will be a lower speed.
Variable Cost Index - PPRuNe Forums
Changing the CI based on wind seems to defeat the purpose. The result of the CI formula is a mach/IAS that results in minimal cost given the current wind, weight, course, and aircraft costs. In a headwind the CI result will be a higher speed, in a tailwind, it will be a lower speed.
12-25-2010, 08:07 AM
#23
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Joined APC: Jun 2010
Posts: 233
The PPrune quote is correct. For any given cost index, the Mach value will increase for a headwind. The last sentence says it all...."cost index is the tool where trip fuel is traded for trip time". In a headwind, the USER selected cost index value can be higher, applying a more aggressive need for reduction in time than assumed in the original cost index value.
It's not so much the wind that you're dealling with....(it could be that you're departing late for whatever reason)....it's the financial costs of arriving late, particularly misconnected passengers, etc., which are very hard to predict without accurate data, and which are not accounted for in the cost index formula. As I said before, there is a limit to the benefit of increasing the cost index in these circumstances because of the exponential increase in fuel burn for very little gain in time saved. Therefore, it's critical to have good financial analysis at the management level to drive the selection of the appropriate cost index. In some situations, no increase is warranted even if arriving more than 15 minutes late. If on the other hand for example, arriving late means that 35 customers will misconnect, and as a result the company will have to put them in hotels overnight and give them meal vouchers...AND IF it's possible to make the connection by decreasing time enroute....then there is a tradeoff that can be calculated. That effect can be multiplied downline if there are domino delays. To correcly manage this requires a broader picture than will typically be availalbe to us in the cockpit...and must involve customer service and other SOCC functions.
Otherwise, in the end, you are throwing good money after bad.
It's not so much the wind that you're dealling with....(it could be that you're departing late for whatever reason)....it's the financial costs of arriving late, particularly misconnected passengers, etc., which are very hard to predict without accurate data, and which are not accounted for in the cost index formula. As I said before, there is a limit to the benefit of increasing the cost index in these circumstances because of the exponential increase in fuel burn for very little gain in time saved. Therefore, it's critical to have good financial analysis at the management level to drive the selection of the appropriate cost index. In some situations, no increase is warranted even if arriving more than 15 minutes late. If on the other hand for example, arriving late means that 35 customers will misconnect, and as a result the company will have to put them in hotels overnight and give them meal vouchers...AND IF it's possible to make the connection by decreasing time enroute....then there is a tradeoff that can be calculated. That effect can be multiplied downline if there are domino delays. To correcly manage this requires a broader picture than will typically be availalbe to us in the cockpit...and must involve customer service and other SOCC functions.
Otherwise, in the end, you are throwing good money after bad.
Last edited by captfurlough; 12-25-2010 at 12:26 PM.
12-26-2010, 08:52 PM
#24
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Posts: 1,001
Do you or do you NOT use a standard CI?
http://www.airlinepilotforums.com/te...tml#post844479
Seems as if Boeing can't make up their mind. Some random airline operating MD-80's and 737's (Delta, American . . . any obvious international carrier I'm missing here?) paid Boeing lots of $ to do a study of the best use of CI, and Boeing seems to recommend a constant CI for each fleet, but reminds us that varying the CI may be the best of all. Why would it not, if you had the ability to do so (some fancy computer cost algorithm to model the best CI, which you'd surely have after paying Boeing to do a study of CI)?
See the complete Boeing article here, including the graphs I don't know how to post.
From Boeing:
A recent evaluation at an airline yielded some very interesting results, some of which are summarized in Figure 4 (see previous page). A rigorous study was made of the optimal CI for the 737 and MD-80 fleets for this particular operator. The optimal CI was determined to be 12 for all 737 models, and 22 for the MD-80.
The table (see fig. 4, on previous page) shows the impact on trip time and potential savings over the course of a year of changing the CI for a typical 1,000-mile trip. The potential annual savings to the airline of changing the CI is between US$4 million and $5 million a year with a negligible effect on schedule.
SUMMARY
CI can be an extremely useful way to manage operating costs. Because CI is a function of both fuel and nonfuel costs, it is important to use it appropriately to gain the greatest benefit. Appropriate use varies with each airline, and perhaps for each flight.
A recent evaluation at an airline yielded some very interesting results, some of which are summarized in Figure 4 (see previous page). A rigorous study was made of the optimal CI for the 737 and MD-80 fleets for this particular operator. The optimal CI was determined to be 12 for all 737 models, and 22 for the MD-80.
The table (see fig. 4, on previous page) shows the impact on trip time and potential savings over the course of a year of changing the CI for a typical 1,000-mile trip. The potential annual savings to the airline of changing the CI is between US$4 million and $5 million a year with a negligible effect on schedule.
SUMMARY
CI can be an extremely useful way to manage operating costs. Because CI is a function of both fuel and nonfuel costs, it is important to use it appropriately to gain the greatest benefit. Appropriate use varies with each airline, and perhaps for each flight.
See the complete Boeing article here, including the graphs I don't know how to post.
12-26-2010, 09:58 PM
#25
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Joined APC: Jun 2010
Posts: 233
I can understand the apparent conflict, but there is an explanation and the Boeing author is correct.
Often, an operator pays a consultant or manager to develop or handle a fuel conseravtion program, and so the operator wants to see immediate results. The easiest way to do this using cost index, and in fact a good starting point, is to develop a general philosophy within the business organization as to how much fuel (cost) is worth how much time (cost). This is a generalization, a basic number, quickly accomplished in consulation with the accounting folks, flight ops folks, and even customer service folks. The typical result is often seen on the line when you get a bulletin that says "effective immediately enter a cost index of XX for the XYZ fleet." Use of that value will generally result in a very measuarable and meaningful fuel and dollar savings.
But to take full advantage of the potential inherent in the use of Variable Cost Index, the operator has to take into account the individual circumstances or drivers that affect a particular flight, and which may alter the original assumptions used to determine a tollerance for time related costs. Some of these circumstances might be:
...Noise curfew, passenger misconnects, temperature performance penalties, crew legalities, potential for loss of slots, gate availability, aircraft routings, maintenace plans, etc.. These situtations carry costs not considered in the formula for calculating aircraft related time costs. Often, these issues are not readily apparent to the flightcrew, and require oversight / coordination within SOC and custormer service. There is a need to quantify the associated potential costs when a flight fails to arrive within a certain period of time from that originally scheduled. If management has that data and can apply that to the situation at hand, an analysis can be made in which a higher cost index can be considered, and selected if appropriate. Again it's worth pointing out that there is definitely a limit to what can be done......you can literally push tons of fuel out the tailpipe for one or two minutes reduction in time costs....normally a poor investment. If the analysis shows that the time savings are adequate to avoid the undersired consequences of late arrival and the associated costs outside the normal calculation of cost index, then the decision to use the higher value is based on the financial result.
Because this takes people to calculate and manage....most airlines do not take full advantage of this capability.
Often, an operator pays a consultant or manager to develop or handle a fuel conseravtion program, and so the operator wants to see immediate results. The easiest way to do this using cost index, and in fact a good starting point, is to develop a general philosophy within the business organization as to how much fuel (cost) is worth how much time (cost). This is a generalization, a basic number, quickly accomplished in consulation with the accounting folks, flight ops folks, and even customer service folks. The typical result is often seen on the line when you get a bulletin that says "effective immediately enter a cost index of XX for the XYZ fleet." Use of that value will generally result in a very measuarable and meaningful fuel and dollar savings.
But to take full advantage of the potential inherent in the use of Variable Cost Index, the operator has to take into account the individual circumstances or drivers that affect a particular flight, and which may alter the original assumptions used to determine a tollerance for time related costs. Some of these circumstances might be:
...Noise curfew, passenger misconnects, temperature performance penalties, crew legalities, potential for loss of slots, gate availability, aircraft routings, maintenace plans, etc.. These situtations carry costs not considered in the formula for calculating aircraft related time costs. Often, these issues are not readily apparent to the flightcrew, and require oversight / coordination within SOC and custormer service. There is a need to quantify the associated potential costs when a flight fails to arrive within a certain period of time from that originally scheduled. If management has that data and can apply that to the situation at hand, an analysis can be made in which a higher cost index can be considered, and selected if appropriate. Again it's worth pointing out that there is definitely a limit to what can be done......you can literally push tons of fuel out the tailpipe for one or two minutes reduction in time costs....normally a poor investment. If the analysis shows that the time savings are adequate to avoid the undersired consequences of late arrival and the associated costs outside the normal calculation of cost index, then the decision to use the higher value is based on the financial result.
Because this takes people to calculate and manage....most airlines do not take full advantage of this capability.
12-28-2010, 09:20 PM
#26
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Joined APC: Aug 2007
Posts: 65
Originally Posted by jet320
Actually 999 is the max! and it does change the descent speed. CI depends on several factors and company policies.
"Because it won't take 1000"
12-29-2010, 06:43 AM
#28
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Joined APC: Mar 2010
Position: In front of my computer
Posts: 230
Originally Posted by serhito
I always wondered one thing. Can the cost index be monitored by the company ? In other words, if you decide to fly 150 one day, can the company know about it ?
12-29-2010, 07:00 PM
#30
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Position: CA
Posts: 483
Some data from ASA, the time related costs ($/hr as of late 2008) for the 50 seat RJ were $482.00 (crew $137, MX $345), the CR7 was $743 (crew $181, MX $562).
CI = Time Related Costs ($/Hour) / Fuel Related Costs (Cents/Pound)
Fuel in Cents per Pound =
Dollars/Gallon ÷ 6.7 Pounds/Gallon x 100 Cents/Dollar
Some random CI numbers based on different fuel costs are as follows;
CRJ200
CI = Time Related Costs ($/Hour) / Fuel Related Costs (Cents/Pound)
Fuel in Cents per Pound =
Dollars/Gallon ÷ 6.7 Pounds/Gallon x 100 Cents/Dollar
Some random CI numbers based on different fuel costs are as follows;
CRJ200
Fuel at $2.00/gal = 29.9 cents/lb with a CI of 16
Fuel at $2.50/gal = 37.3 cents/lb with a CI of 13
Fuel at $3.00/gal = 44.8 cents/lb with a CI of 11
Fuel at $4.00/gal = 59.7 cents/lb with a CI of 08
The useful range of CI for the CRJ is 000 to 150.
Fuel at $2.50/gal = 37.3 cents/lb with a CI of 13
Fuel at $3.00/gal = 44.8 cents/lb with a CI of 11
Fuel at $4.00/gal = 59.7 cents/lb with a CI of 08
The useful range of CI for the CRJ is 000 to 150.
-
CR700
Fuel at $2.00/gal = 29.9 cents/lb with a CI of 25
Fuel at $2.50/gal = 37.3 cents/lb with a CI of 20
Fuel at $3.00/gal = 44.8 cents/lb with a CI of 17
Fuel at $4.00/gal = 59.7 cents/lb with a CI of 08
Fuel at $2.00/gal = 29.9 cents/lb with a CI of 25
Fuel at $2.50/gal = 37.3 cents/lb with a CI of 20
Fuel at $3.00/gal = 44.8 cents/lb with a CI of 17
Fuel at $4.00/gal = 59.7 cents/lb with a CI of 08
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