L I E> R:A R: Y- OF THE U N IVLR.5ITY Of ILLINOIS 62913 no.\-\0 Return this book on or before the Latest Date stamped below. University of Illinois Library | -7 19S9 ***aws OCT -4 1968 ' ! ^$ .J AUG 2 AUG 5» •*/ mr;Q H ■ 2 14 OCT 2 DEC 1 1975 mm 91380 964 MAR Wfii 9 08 1982 2 8 1985 L161— H41 6s 7 AERONAUTICS BULLETIN : NUMBER SEVEN UNIVERSITY OF ILLINOIS THE INSTITUTE OF AVIATION URBANA, ILLINOIS Light Aircraft Operating Costs By Leslie A. Bryan UNIVERSITY OF ILLINOIS BULLETIN VOLUME 47; NUMBER 3; AUGUST, 1949. Published seven times each month by the University of Illinois. Entered as second-class matter December 11, 1912, at the post office at Urbana, Illinois, under the Act of August 24, 1912. Office of Publication, 358 Administration Building, Urbana, Illinois. THE INSTITUTE OF AVIATION, established in 1945 as the Institute of Aeronautics, is operated as the administrative agency responsible for the fostering and correlation of the educational and research activities related to aviation in all parts of the University. Other functions include academic instruction, flight training, management of the University of Illinois Airport, and aeronautical research. In connection with the latter function, the Institute issues two types of publications . . . first, a group of reports on research results, and sec- ond, a series of bulletins on aviation subjects of an extension service nature to the citizens of the State. The following publications have been issued: Bulletin One: Municipal Airport Management, Leslie A. Bryan, 1947. (Out of print) Bulletin Two: Landscape Planting for Airports, Florence B. Robinson, 1948. Bulletin Three: Labor Relations in the Air Transport Industry Under the Amended Railway Labor Act, E. B. McNatt, 1948. Bulletin Four: Airport Zoning, J. Nelson Young, 1948. Bulletin Five: Evaluation of the School Link as an Aid in Primary Flight Instruction, A. C. Williams, Jr., and Ralph E. Flexman, 1949. Bulletin Six: Lightplane Tires on Turf and Concrete, Leslie A. Bryan, 1949. Bulletin Seven: Light Aircraft Operating Costs, Leslie A. Bryan, 1949. Publications of the Institute of Aviation will be sent free of charge upon request. 2500—6-49—41664 UNIVERSITY OF ILLINOIS THE INSTITUTE OF AVIATION Leslie A. Bryan, Ph.D., LL.B., Director Bernice Schrader, A.M., Editor Light Aircraft Operating Costs A Case Study By Leslie A. Bryan Professor of Management College of Commerce and Business Administration Director, Institute of Aviation University of Illinois Published by the University of Illinois, Urbana 1949 FOREWORD THIS MONOGRAPH is the seventh in a series of bulletins on avia- tion subjects which are being issued from time to time by the Institute of Aviation. It concerns the operating costs of light aircraft in a speci- fied situation and is an addition to the information available on aircraft operating costs. Estimates of the probable costs of light aircraft operations, even when made by the best informed persons, may be proved incorrect in the light of subsequent events. Consequently, the Institute decided to make a retrospective survey of the period from February 1, 1948, when a new cost system was initiated, until the end of that calendar year. Because of their interest to operators, to industry, to private flyers, and to business executives, the results of the survey of the actual costs of operating the individual light airplanes which at that time were included in the University of Illinois fleet are made available in this bulletin. The author gratefully acknowledges the assistance given him by Mr. David A. Gillespie, Supervising Accountant, Business Office, and by Mr. Jesse W. Stonecipher, Chief Pilot, and Mr. Forrest L. Lan- caster, Aircraft Maintenance Engineer, Institute of Aviation, all of the University of Illinois. In this monograph, as in all publications of the Institute, the author has had complete freedom to express his opinions, understanding that he assumes sole responsibility therefor. Leslie A. Bryan, Director July, 1949 INTRODUCTION The University of Illinois, through its Institute of Aviation, operates a fleet of aircraft for routine student flight training and also for the transportation of University faculty and staff members on University business. Thirty-two of the aircraft which were included in the fleet during the period covered by this study were light aircraft. Each weighed under 3,200 pounds gross and was equipped with a single engine which delivered between 65 and 220 horsepower. Since the Institute desired to recoup the cost of operating the fleet, particularly for those airplanes which were used primarily in the faculty and staff charter service, a retrospective study was made of the operating costs of the aircraft for the period from February 1, 1948, to January 1, 1949. Because a new record-keeping system was in the process of being initiated during January, 1948, that month was not included. The results of the study are presented in three tables. Table 1 gives an outline history of each of the thirty-two light aircraft. Table 2 summarizes the direct costs of fuel, oil, and maintenance. Table 3 shows a breakdown of other cost items together with the final total operating costs for the period studied. These tables gave the University the opportunity to draw certain conclusions concerning the operation of its own fleet of aircraft. They may be of help in methodology and in other ways to operators who are able to adapt the figures to their own businesses or circumstances. Although the results of the study represent the cost of operating the University of Illinois fleet during the period in question, no validity for universal application is claimed for the figures. Indeed, the Uni- versity's own cost figures have changed since the study. Likewise, they may have very little application or usefulness to another operation. Some items which have been included as costs might be questioned, and others, particularly hangar rent, which have been excluded would be included under other conditions and circumstances. Also, the amount of flight time for some of the aircraft on the list is so small that their costs are of questionable statistical value. It should be borne in mind, also, that the per-hour light aircraft operating costs decrease rapidly as the flight utilization of the airplane increases and that the utilization of University aircraft is, in general, above average. (J. OF ILL" UB. 4 LIGHT AIRCRAFT OPERATING COSTS EXPLANATION OF COST ITEMS Fuel and Oil The costs for fuel and oil on each airplane represent the actual expenditures for these items, exclusive of a small number of gasoline purchases made on cross-country trips which could not be assigned to individual aircraft. Such purchases, however, were too few to make any appreciable difference in the fuel cost totals. Relatively little oil (average about one quart) was added between the complete oil changes which, according to the established policy of the University Airport, were made in each of the aircraft after every twenty-five hours of flight time. Additional facts which should be noted in connection with the figures are, first, that the standard fleet operating procedure calls for the use of decreased throttle on the take-off after breaking ground, as well as a cruising speed approximately one hundred r.p.m. less than that recommended by the engine manufacturer, and second, that most Table 1. University of Illinois Light Aircraft Fleet Operated During Cost Study. Feb. 1, 1948 to Jan. 1, 1949 Type NC No. Date Pur- chased New or Used Hours on Plane When Purchased Years of University- Operation Months Operated During Study Cessna 140 2301V Cessna 140 2324V Piper Supercruiser PA-12. . 4185M Beech A35 752B Beech A35 720B Beech 35 80460 Stinson 150 97692 Aeronca 7AC 82993 Aeronca 7AC 82994 Aeronca 7AC 82995 Aeronca 7AC 82996 Aeronca 7AC 82997 Aeronca 7AC 83427 Aeronca 7AC 83428 Aeronca 7AC 83429 Aeronca 7AC 83430 Aeronca 7AC 83431 Aeronca 7AC 1536E Aeronca 7AC 1537E Aeronca 7AC 1538E Aeronca 7AC 1539E Aeronca 7AC 1540E Aeronca 7AC 1541E i 12(1 89546 I 120 89623 Er< "mi..- 415-< 86979 El pe 415-C 90272 Kf < 671 7K Boeing A75N1 SUM Boeing A7SN1 578 13 Boeing A75.M 64078 Taylorcrafl B< 65 27460 3-48 New 1 10 3-48 New 1 10 12-47 New 1 11 11-48 New 1 1 9-48 New 1 3 6-47 New 2 11 10-46 New 3 11 4-46 New 3 11 4-46 New 3 11 4-46 New 3 11 4-46 New 3 11 4-46 New 3 11 5-46 New 3 11 5-46 New 3 11 5-46 New 3 11 5-46 New 3 11 5-46 New 3 11 9-46 New 3 11 9-46 New 3 11 9-46 New 3 11 9-40 New 3 11 9-46 New 3 11 9-46 New 3 11 6-46 New 3 11 6-46 New 3 11 5-46 Used 69.9 3 11 6-46 New 3 11 2-48 Used 63.8 1 10 in 1. 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XOXXX 00X00X00 X X »-i ^h i-h «-< ■c* th X X XaOUTO *o CN ©CNcOTfu 0>»^^ O* O CN CN ( rt< vO O". C> CN »0>'" 55S. coco OO cucca :o :©< £ c g s J= O C c o 2 o o (UC u u _ OO « i~~ t~- ooooo t— t — t — I — t^ rt rt a! rt al u u o u o n c c n c ooooo OOOOO <«« cd rt cC rt rt u u u u . O a) C0H THE UNIVERSITY OF ILLINOIS 7 of the gasoline consumed came out of the University's own tanks and had been purchased at bid prices with an average saving of several cents a gallon over retail prices. The fuel used was, in all cases, eighty octane aviation gasoline. Airplane Maintenance Costs Airplane maintenance costs include expenditures for all labor and material used in the maintenance and repair of the individual aircraft, including accident repairs, major engine overhauls, and rebuilding of airframes. Labor costs averaged approximately $1.31 an hour. Charges for material were at actual cost to the University, possibly ten to twenty per cent less than retail prices. In the aggregate, however, the airplane maintenance expense is undoubtedly higher than average since twenty-five-hour, fifty-hour, seventy-five-hour, as well as the required one-hundred-hour inspections, and annual inspections were run under general instructions to err on the side of safety and to keep the equipment on an "as good as new" basis and, where possible, beyond the minimums required by the Civil Air Regulations. Only experienced aircraft and aircraft engine mechanics were employed. A ratio of one mechanic to four aircraft was maintained. The average maintenance cost per flight-hour on aircraft less than one hundred horsepower was $1.74. Shop Overhead Maintenance The shop overhead maintenance was computed to be $1.14 a flight- hour and was applied uniformly to all aircraft on the basis of the total flight-hours of each. The salaries of the aircraft maintenance engineer, the shop foreman, the machinist, the stock room clerk, and the secre- tary — all of whom devoted practically one hundred per cent of their time to the upkeep of the fleet — were totaled in the overhead. Included also were the labor and material costs of repairing airplane and engine parts which were then stored in the stock room for future use. Shop Equipment Depreciation To determine the depreciation of shop equipment, the inventory maintained by the University Purchasing Division was reviewed with the Aircraft Maintenance Engineer, and the total value was depreciated on a ten-year basis. For the period in question, the value on a flight- hour basis was computed to be sixteen cents a flight-hour. 8 LIGHT AIRCRAFT OPERATING COSTS Insurance The University acts as self-insurer of its own fleet of aircraft except in the case of public liability and property damage coverage. The fact that the total expense of repairs to damaged aircraft amounted to only eight cents per flight-hour seems to indicate that this policy is wise. With respect to public liability and property damage insurance, the University has a statutory limitation on liability of $2,500 and then only in case of negligence. Hence, it is conceivable that personal liability in excess of that figure might accrue to pilots of University aircraft. To protect employees against such remote contingencies, in- surance is carried under which the insurance company waives the right to use the statutory defense. The per-hour cost was 9.1 cents. The bodily injury coverage limits are $50,000 and $250,000, and the property damage limit is $50,000. Linemen's Salaries Linemen are on duty at the University Airport twenty-four hours a day, seven days a week, to service the University fleet as well as transient aircraft using the field. In order to have two linemen on duty during the day and one at night, the services of seven are required. The maintenance shop receives the equivalent of one lineman's full time. The remaining six devote about one-third of their time to tran- sient aircraft and two-thirds to University airplanes. On this basis, the total linemen's salaries allocated to this study amounted to fifty-four cents for each flight-hour. Airplane Depreciation The University depreciates its flight equipment on the straight flight-hour basis, although there are several other methods. So far this method has worked satisfactorily. It is especially useful and reason- ably adequate in cases of greater-than-average annual aircraft utiliza- tion. The University aircraft annually are flown more than twice the national average number of hours for light aircraft. During the period of the study, all two-place trainers were de- preciated at $1.00 a flight-hour; the Piper Supercruiser PA-12, at $2.00; the Stinson 150 and the Seabee RC-3, at $3.00; and the Boeings and the Beechcraft, at $4.00. The depreciation rate on the two Beech A35's recently was raised to $5.00 per flight-hour due to increase in purchase price and to the installation of additional radio equipment in the aircraft. UNIVERSITY OF ILLINOIS-URBANA 3 0112 005630444 su III: !:::' J mm * I!"