Economic processes occurring in transport result in costs that burden three groups of entities to varying degrees and in different ways: transport enterprises, transport service users, and the state and society. Enterprises are burdened with their own production costs, service users with the costs of meeting transport needs, and the state and society with the social costs of transport.
The global sum of transport costs in the economy must be balanced with the sum of revenues from the sale of services, taking into account fiscal burdens and fees for the use of transport infrastructure.
The relationships between costs and prices, as fundamental economic dependencies, determine the efficiency of entities operating in the market. In every market, including air transport, there is a need to conduct research on cost structures. The cost side forms the basis for assessing the quality of the production process in an enterprise (production of air services), while the prices of services determine the conditions of their sale on the market and inform and decide on the scale of the exchange process. Reducing costs while maintaining revenue levels or increasing revenues while maintaining price levels leads to improved profitability and efficiency of the airline’s operations, and thus to increased productivity of the sector. Furthermore, it is necessary to point out the fundamental difference in the proportion of costs incurred by transport enterprises and airports. The main objective of the article is to analyze the costs of market entities operating in the air services market.
Costs in theoretical terms
Nowadays, two forms of costs are distinguished:
- accounting costs – having a form narrowed down to expenses documented by records,
- economic costs consisting of explicit costs, depreciation, and implicit costs including alternative costs or opportunity costs and the producer’s own labor inputs.
In addition to the above classification of costs, there are other general divisions, including private, external, social, psychological, full, own, incurred, planned, and normative costs.
Analyzing the level of costs in an enterprise requires separating certain groups from the total costs – material, personnel, financial, and depreciation costs. Only then can the factors influencing a given type of cost be determined, which consequently leads to establishing the actions that the enterprise should take to reduce the share of individual cost groups in the enterprise’s revenues.
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Source: Logistyka Magazine
Tloczynski_Koszty_pasazerskiego_rynku_transportu_lotniczego.pdf