NATIONAL AVIATION UNIVERSITY Department of Aviation Transportation Organization

TERM PAPER

From the subject Air Passenger Transportations

Theme: Organization of Schedule Air Passenger Transportation En-route KBP-JFK

Done by: student of the group 309 Faculty of Management and Logistics Kiziun O.O. Variant # 6 Supervisor: Ph.D. Tetiana A. Akimova

Kyiv 2011

Report This work has 38 pages includes 18 tables, 4 diagrams, 15 points of references. The aim of this term paper is to: to make a market research of air passenger transportation between UkraineUSA, development of a new flight schedule for this route, choosing to purchasing type for AC (loan or lease), calculation of cost per seat. So in this term paper was analyzed the market of air passenger transportation between Ukraine and the USA, were identified competitive forces already operating in this area; defined what exactly attracts aviation passenger traffic between Ukraine and the United States and why the development require another flight. Was also presented forecasts for air passenger and their development prospects on the route Kyiv - New York. Yet I was considered the main legal issues in international air law, and that all relations between Ukraine and the USA. Finally, we designed the new schedule for flights, have selected an aircraft, which will carry out flights on this route, it became - Boeing 767-300ER long haul passenger aircraft, calculated the best options to purchase aircraft, as well as the cost of one seat airplane.

Key words: aircraft, flight schedules, lease, loan, hub, conventions, treaties, air transportation between Ukraine and the USA, legal, commercial law, the cost of flight and the cost of an airplane seats and fare for the flight.

The List of Symbols, Units, Abbreviations and Definitions 1. A/C Aircraft. 2. FAA - Federal Aviation Administration. 3. JFK John Kennedy Int`l Airport. 4. Boryspil Airport. 5. USD USA dollar. 6. GDP Gross Domestic Product. 7. F&L Fuel and lubricants materials. 8. ICAOInternational Civil Aviation Organization. 9. Air transportation market is a sum of supplied services by airlines and solvency of demand on this transportation mode. 10. Slot place in schedule, in schedule of landings and take-offs in arrival and departure airports.

Content 1. Introduction....5 2. Air transportation market research between USA and Ukraine....6 3. Passenger transportation forecast........13 4. Legal side....15 5. Schedule planning...18 6. Selecting of aircraft............20 7. Calculation of the flight cost price..22 8. Tariff policy....36 9. Conclusions................37 10.References...38

Introduction To organize the air transport of passengers successfully we need to identify the air transportation market. Air transportation market is a set of proposed haul airline transportation services by air and solvent demand for this type of transport. A deep and comprehensive study of demand for air transport significantly affects the efficiency of airline flight park, and thus the overall outcome of their financial activities. The major condition for the existence of aviation market is the demand for air transportation and carriers that can provide appropriate services. Today 11 domestic airlines have regular flights in 42 countries of the world. Still far as to foreign airlines in terms of traffic, and on the frequency of flights. Total volume of passenger traffic by foreign airlines on average 15% higher and in some areas their advantage even greater. As before, the biggest volume of passenger traffic between Ukraine and Russia, Germany, Czech Republic, Great Britain, Hungary, Austria, Israel, Turkey, Poland, the Netherlands, the United States. In recent years, Ukraine has gained market access to distant air. Market haul flights - in America, China, Thailand and other far countries - the last time Ukraine was unavailable. In the absence of effective machinery passengers had transfer point in hub in Europe and other regions. Aircraft that previously used, such as Il-62, have long been unable to compete with Western counterparts. In addition to foreign airports to Soviet-made equipment are being restricted flights, increasing fees for services, etc.

Air Passenger Market Research En-route Ukraine-USA Another stimulus to the market flights USA-Ukraine was received in 2003 after the opening of direct flights by airline Aerosvit. Nonstop flights from Kyiv to New York Ukrainian carrier resumed four years after the termination of their state company "Airlines of Ukraine". Then in 1999, the U.S. cut off for Il-62 of "Airlines" as such does not meet the country introduced the environmental and noise restrictions for aircraft. Aerosvit took into account the lessons of predecessors for reclaiming of Transatlantic it started to operate long-haul Boeing-767 and began to build an extensive network of ticket sale to the U.S.. At the same time to cooperate actively involved in the sale of ethnic agencies that worked with former compatriots. As a result, less than a year on its flights from New York Airport.after Jh. Kennedy to Boryspil, company managed to attract the "Ukrainian" passenger, who was previously distributed between foreign carriers (Lufthansa, Czech Airlines, Air France, British Airways, Austrian Airlines and others). Of course, the opportunity to expand its presence in the Ukrainian sector benefited Transatlantic and European airlines. They, with the consent of the aviation authorities of Ukraine, twice or three times increased the intensity of flights between Boryspil and airport-based (Munich, Vienna, Paris, Amsterdam, London). As a result of increased outflow of Ukrainian passengers on flights to North America via Europe "hubs". American Airlines also did not hide intentions to gain a foothold in Europe and in Ukraine in particular. But until recently to open non-stop flights to Kyiv most players do not dare. At the Ukraine-USA they would prefer to work together with its European partners in air alliances: Europeans took out his base in Kiev "hub", and Americans - were transported across the Atlantic. The first overseas companies to own land on the market, New York - Kyiv was used Delta Airlines. Let`s analyze the dynamics of GDP growth in Ukraine and New York. According to State Statistics Committee of Ukraine have the following characteristics:

Years 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

GDP mln.$ 170070 204190 225810 267344 345113 441452 544153 720731 948056 914720

Table 1

Dynamic of GDP Growth in Ukraine

1400000 1200000 1000000 800000 600000 400000 200000 0 200120022003200420052006200720082009201020112012 Series1 Linear (Series1) y = 92790x - 32179 R = 0.9204

Diagram 1

According to American web-site of statistics there is following data

Years GDP bil.$
13596 2003 2004 13658 13795 2005 13 892 2006 2007 2008 2009 2010 13928 14 060 14 002 14560

Table 2 Dynamic of GDP Growth in USA

14400 14200 14000 13800 13600 13400 13200 2003200420052006200720082009201020112012 y = 76.964x + 13539 R = 0.9245 Series1 Linear (Series1) Linear (Series1)

Diagram 2 While analyzing this data we can see that GDP tend to growth. Trade and cooperation between USA and Ukraine develop very fast. Lets consider goods turnover between this two countries.

Export (k.USD) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 124100,0 134100,0 178900,0 242800,0 281400,0 316100,0 407904,2 551390,0 441454,9 500256.0

Import (k.USD) 278400,0 210000,0 253800,0 202900,0 312700,0 277100,0 310776,5 319483,5 302327,3 345748.3

Goods turnover(k.USD) 402500,0 344100,0 432700,0 445700,0 594100,0 593200,0 718680,7 820873,5 743782,2 800345.3

Table 3 Dynamic of Goods Turnover

1200000 1000000 800000 600000 400000 200000 0 200120022003200420052006200720082009201020112012 y = 61915x + 262161 R = 0.9215

Diagram 3 We see the trend of growing goods turnover between Ukraine and USA. It means the development of economic relationships between countries. On passenger

turnover and passenger flow a number of socio-economic factors have influence. The greatest amount of people which travel are after 35 years old. Entry of foreigners from USA to Ukraine from 2006 till 2009
Amount of foreigne rs came to Ukraine/ Total : Officials, diplomatic Turis m Private Educ ation Working Immigration Sport&cult ural exchange

2006 2007 2008 2009 2010

113507 132376 128122 123001 129901

18730 19828 19551 14120 15070

41420 50266 50698 49284 50684

46512 55871 52741 53505 56705

181 323 158 150 201

39 55 46 49 35

267 371 401 70 80

6358 5662 4527 5373 5697

Table 4

Tariffs and Flights Proposed by Competitors Economy class

Table 5

Business Class

Table 6

Let`s review a schedule of flights en-route New-York Boryspil using Amadeus GDS

Table 7 Comparing the prices of airlines Aerosvit offers tariff, which is in fairly low price category, which is more attractive to passengers who travel on this route New-York Boryspil. We see that the only company Aerosvit provides direct flights, while other airlines are doing transplants in Europe, the passengers take precious time. But the airline Aerosvit no flights on Mondays, and we will correct it.

Passenger Transportation Forecast Scientific forecasting has many methods and techniques of forecasting: the forecast trend, econometric relations and industrial surveys and market

conditions. The basis of forecasting the volume of passenger traffic should use an integrated method based on systematic analysis of all interacting factors. At the same time in this forecast should take into account the coordination of demand and the possibility of its software. Economic and geographic research to enable the growth trends in population, its movement and the need for change in the future in the region. Consider the direction of the US-Ukraine. Dynamic of Passengers Transportation Growth from US to UA
135000 130000 125000 120000 115000 110000 105000 100000 2006 2007 2008 2009 2010 2011 2012 Series1 Linear (Series1) y = 29221x + 11069 R = 0,936

Diagram 4 Based on diagram 4, we see in terms of trend lines that will increase the number of passengers annually. Most passengers arriving for tourism, business and individual needs and business reasons. There is a considerable number of citizens interested in direct flights to New York because this city home to many immigrants from Ukraine. In addition, New York - the world's business center. 2010 was for New York to a record number of tourists visiting it. Procedure 10 million foreign and 30 million Americans have decided to look at the largest city in the U.S.. Also, in New York often are different measures and actions that attract tourists worldwide. Analysis of statistical data on GDP and trade are making a definite conclusion that the economic relations between developing countries and the

trend observed in the future. Forecast of traffic on this route determines the increase in the number of passengers who use the route. The route Kyiv - New York from Ukrainian airline serves Aerosvit - Ukrainian Airlines ". Regular non-stop flights between the capital of Ukraine and New York (USA) performed five times a week medium-haul Boeing 767. From Kyiv airplane flying on Tuesdays, Thursdays, Fridays, Saturdays and Sundays and from New York - on Tuesdays, Thursdays, Fridays, Saturdays and Sundays. Aerosvit, the largest Ukrainian airline, serves 31 international and 7 domestic air routes. With nonstop flights of foreign airlines do not do anything. All they do on Kyiv - New York with one or two stops (usually the Amsterdam, Frankfurt, Zurich, Paris, London). After analyzing traffic flow data in the country, shows that in 2011 it observed about 125 thousand passengers, in 2012. 150000. In 2013. - 185 thousand passengers. For this route Kyiv-New York, given that there are 5 flights per week on Boeing 767 (the number of passengers in mixed class cabins - 211). Given that the payload is equal to 100%, then a week receive 725 passengers carried, in the year (multiplied by 52 weeks) - 37 700 passengers. The difference between the passengers carried in 2009 and 2011 will make predictable 10 474 passengers per year. If we divide the 52 weeks we will get an average of 250 people.

Legal Side In the field of European integration for Ukraine is an important support from international partners who have extensive experience in strengthening and developing democratic institutions and building a market economy. Particular attention in this regard deserves assistance granted to Ukraine during the reporting term strategic partners - the U.S. and Europe. There were historic strengthening of strategic partnership between Ukraine and the USA. Its basis is today the agreement will be recorded in the Joint Statement "of the new century agenda for Ukrainian-American strategic partnership" adopted by the presidents of Ukraine and the United States 4 April 2005 in the course of the visit of President of Ukraine Victor Yushchenko to the USA. Now this statement made by 90%. Among the major achievements of the Ukrainian-American partnership for the period then ended, entails the following: granting Ukraine the status of the U.S. Government market economy; sign a bilateral protocol between Ukraine and the United States on the conditions of market access for goods and services in preparation for our state to join the World Trade Organization; cancellation of Ukraine on the Jackson-Vanik; lifting trade sanctions against Ukraine and the resumption of benefits under the Generalized System of Preferences trade in the U.S.; revitalization of the simplification of visa regime for citizens of Ukraine to increasing contacts between citizens of both countries. Jackson-Vanik Rectification In October 2004, restrictions were introduced in the development of flights between Ukraine and the USA. Sanctions against our country was initiated by U.S. Federal Aviation Administration ( FAA) for the audit of the State. FAA then decided that Ukraine "does not comply with international safety standards set by International Civil Aviation Organization (ICAO) a number of criteria". As a result, our country FAA safety rating was lowered from the first category to another.

International Agreements International air transportation regulate several multilateral

agreements. Among them are Chicago Convention on International Civil Aviation of 7 December 1944., Ratified by Ukraine on August 10, 1992 and for its effect from 9 September 1992 p. It was a compromise agreement between the states that participated in its preparation. Standards of the Chicago Convention Protocol complements the introduction of new 83-rd article of the Convention on International Civil Aviation, ratified by Ukraine on February 15, 1995. The Convention is the basis for national standards. Having established the principle of recognition of state sovereignty, the Convention reaffirmed this right of each State to regulate air traffic within its territory, the business of motor transport enterprises and exercise jurisdiction over the traffic. The Chicago Convention sets general requirements of civil aviation in international flights. It is about principles and rules of flight, aircraft registration and documentation, investigation of air accidents, the procedure for establishing technical standards. Effective regulation of air transportation made possible by the activities of international organizations. One of the first established international air transport association (1919). In the early 40's to her were the largest U.S. and European airlines. In 1945 this association was reorganized and adopted its new Constitution. It brought together the leading airlines in Europe, USA, Asia and Australia. Association should promote safe, regular and economically beneficial for States flights. To this end, it was adopted only provided transport (1927), the form of tickets and baggage receipts, bills of lading (1929), conditions of carriage of passengers and baggage (1954) and others. Creation in 1944 p. intergovernmental specialized agencies - the International Civil Aviation Organization (ICAO), which started operations in 1947 p., led to joint efforts to resolve the airlift of more than 160 countries. According to Art. 1944 Chicago Convention and the Charter Organization ICAO promotes the development of international civil aviation, developing guidelines and standards for traffic rules, maintenance of aircraft, promotes safety on international air routes.

The main international agreement that defines the conditions of air transport passengers and cargo, is the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw October 12, 1929 (Warsaw Convention 1929).. Ratified by Ukraine on August 14, 1959 it came into force for it on November 14, 1959 Warsaw Convention 1929 supplemented and modified signed September 28, 1955 Hague Protocol of Amendment to the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed in Warsaw on 12 October. Hague Protocol became effective for Ukraine 19/10/1960 Warsaw Convention 1929 complements the so-called Guadalajara Convention, in addition to the Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air performed by a person who is not a carrier under the contract. Ukraine signed the September 18, 1961 ratified September 5, 1983, and on January 15, 1984 it has become effective for Ukraine. Supplementing the Convention and Protocol of Guatemalan March 8, 1971. This protocol was an act aimed at improving air carrier liability to passengers. Rome Convention on Damage Caused, Foreign Aircraft to Third Parties on the Surface of 7 October 1952, to which, among other countries was the Soviet Union from 1982.

Schedule Construction The route Kyiv - New York from Ukrainian airline serves Aerosvit. Regular non-stop flights between the capital of Ukraine and New York (USA) performed five times a week medium-haul Boeing 767. From New York AC fly on Tuesdays, Thursdays, Fridays, Saturdays and Sundays, from Kyiv, in those days. Slots are place in the timetable, schedule of take-offs-landing at the airports of departure and destination. Regulatory allocation of slots for most of the national distribution systems, recommendations were IATA. These rules are formulated in Worldwide Scheduling Guidelines. There is a considerable number of citizens interested in direct flights to New York because this city home to many immigrants from Ukraine. In addition, New York - the world's business center. For this reason, I believe that to create another plane for people who fly in for the most part (the beginning of the business week). And anyway, in my opinion, departing early in the week better than the middle of it. These regular nonstop flights between Kyiv and New York will be operated once a week medium-haul Boeing 767-400ER. Flights from KBP to JFK
Flight VV424 Departure KBP Destination JFK Take-off 06:00 Landing 15:00 Flight days Mon A/C type 767-400ER

Table8 Flight from JFK to KBP

Flight VV424 Departure JFK Destination KBP Take-off 00:10 Landing 09:10 Flight days Mon A/C type 767-400ER

Table 9

Aircraft Choosing Choosing of A/C is a very important and difficult task that can be performed on different reasons. For development of a new flight we choose Boeing 767-400ER. Let`s compare technical and economical indices of an aircraft. We will compare Boeing 767, Boeing 767-300ER, Boeing 767-400ER, Boeing 777-200, Boeing 777-300.
A/C Technical Characteristics

1. Boeing 767 (price 27-80 m $, depending on the year of production)

Table 10 2. Boeing 767-300 ER (price 47-107 m $, depending on the year of production)

Table 11 3. Boeing 767-400ER (price 108-136 m $, depending on the year of production)

Table 12

4. Boeing 777-200 (price 128-146 m $, depending on the year of production)

Table 13

5. Boeing 777-300 (price 151-170 m $, depending on the year of production)

Table 14

Since the projected number of passengers per flight Kyiv - New York each week will be about 250 passengers, then developed new flight chose to compare the two aircraft Boeing 767-400ER and the 767-300 ER. All other aircraft parameters, such as flight range exceeds or not accept the distance from Kyiv to New York, which is 7525 km, and the required number of mall. places. Boeing 767-400ER (Extended Range) - long-range passenger aircraft. In late 1996 Boeing Company announced a 767-400 aircraft design, featuring a stretched fuselage to 6.43 m (compared with 767-300 aircraft) and increased wingspan, which is installed at the ends of the vertical aerodynamic surface. The aircraft can carry up to 375 passengers a distance of 5635 nautical miles. By plane using complex digital avionics EFIS produced by American firms "Rokwell-Colins, which has six multi-colored displays. The plane is designed to replace L - 1011, DC - 10-30 and A300. The first 21 aircraft were ordered by the airline Delta Air Lines April 28, 1997. Planes began in autumn 1999. The first aircraft delivered in the summer of 2000.

Flight Cost Price Calculation (variants: loan or lease) Data for calculation of A/C taking in loan or lease Price of new A/C 125 m. USD (Boeing 767-400ER) and 75 m. USD (Boeing 767300ER) A number of paying quarters for a period of 5 years Loan percentage rate 13% VAT 20% Average year loan rate - 15% Depreciation 10% Credit Calculation of loan suppose an every month payments for percentage of loan . Amount of the next payment is: V = pV/n, where pV prior amount of loan n number of years Amount of the next payment in percentage is: I = pV*rate, where rate year percentage rate. Composition of annual credit paying off table
# of payment 1 2 3 4 Debt on credit, m. USD 125 100 75 50 Percentage payment 16,25 13,00 9,75 6,5 Credit payment, m.USD 25 25 25 25 41,25 38 34,75 31,5 Total payment, m. USD

5 Total:

25

3,25 48,75

25 125

28,25 173,75

Table 15 The calculation of per cents for credit on purchasing of Boeing 767-400ER the amount of USD 173,75 millions will be spend.
payment Debt on credit, m. USD 75 60 45 30 15 Credit payment, Percentage payment m.USD 15 15 15 15 15 75 24,75 22,8 20,85 18,9 16,95 104,25 Total payment, m. USD

1 2 3 4 5 :

9,75 7,8 5,85 3,9 1,95 29,25

Table 16 Leasing of aircraft . Coordination of the method of calculating the lease payment, you can: Financial leasing with full amortization; operational leasing. Calculate the lease payment on a financial lease with full depreciation. Calculation of the total lease payments made by the formula:

LP = DC + PC + CL + VAT, where DC - depreciation; PC - a charge for using credit; CL - commission lessor; VAT - Value Added Tax. Calculation of the Average Annual Cost for Aircraft Boeing 767400ER
Price of A/C on the Period year beginning m. USD Depreciation, m. USD A/C cost in the year end Year average price of A/C, m. USD

1 2 3 4 5

125,0 112,5 100,0 87,5 75,0

12,5 12,5 12,5 12,5 12,5

112,5 100,0 87,5 75,0 62,5

118,75 106,25 93,75 81,25 68,75

Table 17 Calculation of the Total Lease Payments 1st year DC = 125 *10% = 12,5 PC = 118,75*0,13 = 15,44 CL = 118,75*0,15 = 17,81 E = DC + PC + CL = 12,5+15,44+17,81 = 45,75; Where E are earnings from lease. VAT = E*0,2 = 45,75*0,2 = 9,15 LP 1= 45,75 + 9,15 = 54,9. 2nd year PC = 106,25*0,13 = 13,81 CL = 106,25*0,15 = 15,94 E = 12,5+13,81+15,94 = 42,25 LP2 = 42,25 +20% = 50,7 3rd year PC = 93,75*0,13 = 12,19 CL = 93,75*0,15 = 14,06 E = 12,5+12,19+14,06 = 38,75 LP3 = 38,75+20% = 46,5 4th year PC = 81,25*0,13 = 10,56 CL = 81,25*0,15 = 12,19 E = 12,5+10,56+12,19 = 35,25 LP 4 = 35,25+20% = 42,3

5th year PC = 68,75*0,13 = 8,94 CL = 68,75*0,15 = 10,31 E = 12,5+8,94+10,31 = 31,75 LP 5 = 31,75+20% = 38,1 LP = LP 1+ LP 2+ LP 3+ LP 4+ LP 5, so LP = 54,9+50,7+46,5+42,3+38,1 = 232,5 (m. USD). After calculation performance it`s became clear that credit will cost USD 173.75 millions and lease will cost USD 232.5 millions. Hence, it is cheaper to take a credit, rather than to lease an aircraft. Calculation of the Average Annual Cost for Aircraft Boeing 767300ER
Price of A/C on the Period year beginning m. USD 1 2 3 4 5 75,0 67,5 60,0 52,5 45,0 Depreciation, m. USD 7,5 7,5 7,5 7,5 7,5 A/C cost in the year end 67,5 60,0 52,5 45,0 37,5 Year average price of A/C, m. USD 71,25 63,75 56,25 48,75 41,25

Table 18 Calculation of the Total Lease Payments 1st year DC = 75 *10% = 7,5 PC = 71,25*0,13 = 9,26 CL = 71,25*0,15 = 10,69 E = DC + PC + CL = 7,5+9,26+10,69 = 27,44; Where E are earnings from lease. VAT = *0,2 = 27,44*0,2 = 5,48 LP1= 27,44 + 5,48 = 32,9.

2nd year PC = 63,75*0,13 = 8,28 CL = 63,75*0,15 = 9,56 E = 7,5+8,28+9,56 = 25,3 LP2 = 25,3 +20% = 30,4 3rd year PC = 56,25*0,13 = 7,31 CL = 56,25*0,15 = 8,44 E = 7,5+7,31+8,44 = 23,25 LP3 = 23,25+20% = 27,9 4th year PC = 48,75*0,13 = 6,34 CL = 48,75*0,15 = 7,31 E = 7,5+6,34+7,31 = 21,2 LP4 = 21,2+20% = 25,4 5th year PC = 41,25*0,13 = 5,36 CL = 41,25*0,15 = 6,19 E = 7,5+5,36+6,19 = 19,05 LP 5 = 19,05+20% = 22,9 LP = LP 1+ LP 2+ LP 3+ LP 4+ LP 5, so LP = 32,9+30,4+27,9+25,4+22,9 = 139,46 (m. USD). After calculation performance it`s became clear that credit will cost USD 104.25 millions and lease will cost USD 139.46 millions. Hence, it is cheaper to take a credit, rather than to lease an aircraft. Calculation of direct fixed costs for flight Kyiv - New York includes the following components: Calculation of airlines cost for operating aircraft. Determination of operating costs fleet is one of the most important tasks in cost calculations.

restoration of basic production funds (BPF) BPF repair costs, contributions to government social insurance, taxes, costs for energy and other items costing. Cost of flight hours of aircraft Boeing 767-400ER and Boeing 767-300ER depends on the conditions of commercial contracts with suppliers and therefore cannot be reliably determined during the preliminary investigation. Is subject to the global average lease prices, this figure will be about 9500USD for the Boeing 767400ER and Boeing 767-300ER.At international airlift aircraft should have available the following types of insurance needed: insurance airplane, insurance of the crew, including flight attendants, insurance of damage caused to third parties on the surface, insurance of damage caused to passengers. Costs for the refueling aircraft fuel (KBP). The cost of aviation fuel is one of the main items of expenditure. Fuel consumption depends on the height of flight take-off weight, duration of maneuvering after takeoff and before landing, the duration of the engines on land as well as the optimal shutter speeds on the stages of flight. In addition, through a special value that gets deleted fuel at high fuel prices on the world market, special attention should be given to calculate the most economical refueling aircraft on the route. The cost of aviation fuel in the various suppliers are not equal. Yes, you can roughly say that the cost of one ton of kerosene is 700USD. 1. Fuel Costs for F&L. Complete filling the whole range of non-stop route use for flight route Kyiv - New York. In this case, fuel costs are determined by the formula: fuel= [(Qland + Q take-off-landing) . P+ qh . flight . P] . Kl fuel= (4,5*700+4,3*9*700)*7= USD 211680, Where fuel(-jfk) costs on F&L en-route KBP-JFK Qland land fuel consumption (1)

Qtake-off-landing fuel for landings, take-offs etc. qh fuel consumption per hour t/ h flight time of flight KBP-JFK; P fuel price USD; Kl coefficient which takes into account price of lubricants. Sum of Qland Qtake-off-landing is 4,5 tons for Boeing 767-400ER and Boeing 767-300ER. Data on qh: 4,3 t/h - Boeing 767-400ER, . Price of lubricants is equal to 1 % of fuel according to flight. 2. Cost on Labor Remuneration W crew=(Hour-paid wage.* / Hours flown+h*)Ncrew. W crew =(2500*9 / 72+200*9)*2=4225 USD where W crew crew wage, flight time, h - crew rate by hour Ncrew number of crew. W f.a. =( Hour-paid wage * / Hours flown+h*)Nf.a. W f.a. =(100*9 / 72+20*9)10=1925 USD) Where W f.a. flight attendance wage - flight time, h - flight attendance rate by hour Nf.a. number of flight attendance. 3. Other Direct Costs Cost of A/C overhaul ( ): (2.2) (2.1)

Nd Ac 0,1 125. = 9 1917usd for (Boeing 767-400ER) Tyear fl 100 585 100 0,1 75 m 585 100 9 = 128,2 for (Boeing 767-300ER)

(3.1) (3.2)

Nd depreciation norm-10% Ac A/C price ., Tyear fl number of year flights h.

Costs for Technical Maintenance (M): Kt.m 1917 0,35 9 670,5usd for Boeing 767-400ER
Kt.m 128,2 0,35 9 403,83usd for Boeing 767-400ER

(3.3) (3.4)

Kt.m. coefficient which takes into account costs on tech. maintenance and overhaul35%

Costs for Social Needs: Cs.n.= W*Kd= 4225*42%+1925*33,2+6150* 0,096%=2419,5 USD were Kd deduction on social needs :

(3.5)

o For flight attendance 33,2% o For crew 42% o Deduction on accidences and diseases ( class of dangerous 19 0,096%) 4. Airport Charges KBP. Airport taxes set of recommendations offered by ICAO. Specially not less each state or airport can make their own features to the rules of calculating the user charges. Rates and fees from the airport operators KBP established order number 459 of the Ministry of Transport of Ukraine on 12.29.1997. Take-off Landing Charge: Ct.l.= Ca/p. Gmax Ct.l.=11*204,12=2245,32 USD for Boeing 767-400ER (4.1)

Ct.l.=11*184,6=2030,6 USD Boeing 767-300ER Where Ct.l. is Airport Boryspil Charge for landings and take-offsUSD; Ca/p- rate of charge according to MTOW = 11 USD in KBP Gmax - MTOW Land Service charge Cl= 540USD. Costs on Crew Meals: Cmealcrew=Ncrew Smealcrew Cmealcrew =12*20=240 USD where Cmealcrew costs on crew meals in KBP USD; Ncrew number of crew Smealcrew meal price USD 20 Lease of one check-in desk = USD 100, and USD 10 for press. JFK Take-off Landing Charge: Ct.l.= Ca/p. Gmax Ct.l.=15*204,12=3061,8USD for Boeing 767-400ER Ct.l.=15*184,6=2769 USD Boeing 767-300ER Ca/p=15 for each ton of MTOW (4.4) (4.5)

(4.2)

(4.3)

Tax for F&L Burning (Cf&l) fixed charge 150USD. Aviation security (Csec) Costs on Crew Meals: (4.3)

charge is 150 USD.

Cmealcrew=Ncrew Smealcrew Cmealcrew =12*35=420 USD where Cmealcrew costs on crew meals in JFK USD;

Ncrew number of crew Smealcrew meal price USD 35 Cost for press USD 10. Territory overfly charge.
R TD Gb 7525. ; D ; 50 100

R TD R TD

Gb 120 35 * 75,25 = 4080USD for Boeing 767-400ER 50 50 Gb =35* 75,25 50 94 =3611 USD 50

(4.7) (4.8)

for Boeing 767-300ER

unique charge for service on every 100 km of orthodromic distance ( 35 USD) D orthodromic distance Gb MTOW 1. 5. Costs on Crew Dispatching. Cdisp=Ncrew.Ndays.Cday + Ncrew.Ndays.Cday2 Cdisp = 12*1*43+12*1*35=936 (USD). 2. Cdisp costs on crew dispatching USD; 3. Ncrew crew number; 4. Ndays -number of dispatching days; 5. Cday1 daily dispatching money ; 6. Cday2 - daily living price in hotel per one person 35USD. 7. Transportation costs of crew are 120 USD. 6. Obligatory Aviation Insurance Ains=(Iac+Icrew+TPLL+PLL)*/Tyearflight (6) (5)

Ains.=(24000+100000*2%+10000000*1%+100000*1%)/585=260 USD Ains obligatory aviation insurance Icrew crew insurance is 2 % from 100000 USD in USA, TPLL third parties legal liabilities

PLL passengers legal liability 7. Variable Costs Calculation Variable Costs in KBP Charge for Passengers Serving in Air Terminal (7.1) Cserv = Npass. Cterminal Cserv =250*13 = 3250 USD Cserv=charge for passengers ssevice Cterminal=charge per one passenger Aviation Security (7.2)

Csec= Npass. Csec Csec = 250 * 4 = 1000 USD Csec aviation security charge Csec = rate of charge Passegers meals cost on board

Cpassmeal = NpassY. CmealY+ Npass. CmealC Cpassmeal = 375*10 + 59*15=4635 USD (7.3) Cpassmeal = 290*10 + 70*15=3950 USD (7.4) NpassY economy class passengers(375); CmealY price of economy meal 10USD; Npass business passengers (59) CmealC price of business meal 15USD. Charge for Passengers Serving in Air Terminal JFK for Boeing 767-400ER for Boeing 767-400ER

Cserv = Npass. Cterminal Cserv =(250+250)*15=7500USD Passegers meals cost on board

(7.5)

Cpassmeal = NpassY. CmealY+ Npass. CmealC Cpassmeal =375*9+59*15= 4260 USD (7.6) Cpassmeal =290*9+70*15= 3660 USD (7.7) Calculation of variable costs for airlines is depending on the commercial load on the tracks. Accounting or variable costs should lead promptly to each particular flight charges of resuming them. Direct Constant-Conditional Costs CC=236779,12 USD for Boeing 767-400ER (8.1) for Boeing 767-300ER for Boeing 767-400ER

CC=232137,13 USD for Boeing 767-300ER Variable Costs VC = 20645 USD for Boeing 767-400ER (9.1)

(8.2)

VC=19360 USD for Boeing 767-300ER (9.2) Seat Price Cost SPC = (CC + VC)/2*Npass SPC =(236779,12+20645)/(2*375)= 343USD for Boeing 767-400ER economy class (10.1) SPC =(236779,12+20645)/(2* 59)=2181 USD for Boeing 767-400ER business class (10.2)

SPC=(232137,13+19360)/(2*290)=403,6USD for Boeing 767-300ER economy class (10.3) =(232137,13+19360) /(2*70)=1796,4 USD for Boeing 767-300ER business class (10.4) As for the additional flight we purchased the airplane in credit, we have to consider it in the ticket: First, calculate for the Boeing 767-400ER:If a loan of 173.75 million USD, then divide the period of 5 years, it will reach 34.7 million USD for 1 year. The number of flights equals 104, so on one flight be broken in the amount of 59 315 USD. Then, if we fly economy class, then divided by 375 seats, will get 159 USD, and when the business class, then divide by 59 seats respectively, and receive 1005 USD. So add the cost of one place and get: economy class 343+159=502 USD business class 2181+1005 = 3186 USD Now calculate for the Boeing 767-300ER: If a loan of 104.25 million USD, then divides the period of 5 years, it will be 20.85 million USD for 1 year. The number of flights equals 104, so on one flight be broken in the amount of 36 260 USD. Then, if we fly economy class, then divide by 290 seats, will get 125 USD, and when the business class, then divide by 70 seats respectively, and receive 518 USD. So add the cost of one place and get: economy class 403,6 +125 = 528,6 USD business class 1796,4 +518 = 2314,4 USD

Tariff policy Tariff policy is quite important for the transport sector, since it depends on income and development. But it should not be interconnected with the improvement of services provided to citizens. In the field of tariff policy provides: provide free transport pricing in the market sectors with a high level of competition; to monitor actual costs and profitability of transport companies - monopolies; to establish, if necessary fixed rates for transportation services of natural monopolies, coordinating activities with other tariff regulation stimulating and restrictive measures; delimit the powers of tariff regulation between state and regional levels of the transport system; ensure the improvement of tariff policy and maintain a single tariff area in accordance with intergovernmental agreements on a concerted policy to determine transport rates. Main improvement of the tariffs should be their differentiation by class differentiation quality of transportation and other forms of transport in young men, consistent end the practice of "transitional" funding and subsidies to loss-making business through cost-effective. Reform of the tariff policy requires improvement of tax legislation. To calculate the cost of the flight, we should add to the cost rate of return. We receive a percentage of profitability by 20%. Then the fare for passengers on flight Kyiv - New York be for Boeing 767-400ER. For economy class USD 602 Business Class 3823 USD. Boeing 767-300ER For economy class 634,2 USD For business-class 2776,8 USD. Since this plane was designed primarily for business travel, then select the aircraft Boeing 767-300ER, where the cost of business class is smaller than if we carry on the Boeing 767-400ER. While using aircraft Boeing 767-300ER for economy class will go to $ 30 overpayment.

Conclusion After reviewing all the data we conclude that the aircraft industry is developing, despite the global crisis. While incurred significant losses, many economic indicators fell sharply down, the market begins to airlift out of the crisis and continues to develop. We observe very high rates of turnover, passenger turnover between the countries. In this case I had researched the market for air transport route - Ukraine USA. By making analysis and forecast for this area, they saw a clear tendency to increase economic relations. After reviewing all the indicators, I decided that it should open a new flight from Kyiv - New York, because in this city live. Also, in New York often are different measures and actions that attract tourists worldwide. This year also occurred action designed to promote certain areas of New York. Another reason for choosing this direction is that all airlines except Aerosvit the transport along the route with stops only in some cases even two. A lot of people interested in non-stop flights. But in Aerosvit no flights on Mondays, and this is the beginning of a new week. In order to develop new flight route found that the purchase of new aircraft, according to calculations concluded that the better buy Boeing 767-300ER. Computing the cost of leasing and credit, concluded that more profitable to purchase aircraft loans, because if us take on lease, the overpayment is almost doubled. For loans to 104.25 million USD will cost airlines, and taking on lease - 232.5 million USD. Having developed a new flight, calculate the tariff which will be for economy class passengers 602 USD, business-class 3823 USD. This is somewhat less than competing airlines.

References 1. : / .. . .: , 2008. 124 . 2. .. : . .: "" : . ., 2007. - 462 . 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. www.aerosvit.com www.ukrstat.gov.ua uastocks.com/macro www.america.gov/ru http://www.ukraviatrans.gov.ua www.airwar.ru www.newyork-info.ru www.mintrans.gov.ua http://www.airticketua.com/direction/kiev_new_york http://www.ereport.ru/stat.php http://www.forumavia.ru/ 153 18.02.2006. 459 29.12.97 .