Appendix A - Appendix A to Subpart C of Part 399—Example of SIFL Adjustment
[Methodology for determining change in operating expense per available seat-mile]
| Year ended September 1979 | Trunks | Locals | Trunks plus locals | Total passenger/cargo 16 | Total operating expense 1 (millions) | $16,455 | $2,522 | $18,977 | $19,384 | Less: | All-cargo expenses 2 | 269 | 269 | 269 | Belly offset 3 | 952 | 153 | 1,105 | 1,153 | Nonscheduled 4 | 141 | 46 | 187 | 205 | Transport related 5 | 379 | 31 | 410 | 416 | Plus: Capitalized lease adjustment 10 | 119 | 2 | 121 | 121 | Passenger operating expense | 14,833 | 2,294 | 17,127 | 17,462 | Passenger fuel cost 11 | 4,103 | N.A. | Scheduled service ASM's (mils.) | 281,671 | 33,051 | 314,722 | 318,459 | Passenger nonfuel operating expense per ASM (dollars) | .04138 | N.A. | Passenger fuel expense per ASM (dollars) | .01304 | N.A. | Total passenger expense per ASM (dollars) | .05442 | .05483 | Year ended September 1978 | Total operating expense 1 (millions) | 14,081 | 2,033 | 16,114 | 16,448 | Less: | All-cargo expenses 2 | 282 | 282 | 282 | Belly offset 3 | 869 | 152 | 1,021 | 1,065 | Nonscheduled 4 | 193 | 53 | 246 | 256 | Transport related 5 | 419 | 30 | 449 | 454 | Plus: Capitalized lease adjustment 10 | 78 | 1 | 79 | 79 | Passenger operating expense | 12,396 | 1,799 | 14,195 | 14,470 | Passenger fuel cost 11 | 3,129 | N.A. | Scheduled service ASM's (mils.) | 262,068 | 27,067 | 289,135 | 292,255 | Passenger nonfuel operating expense per ASM (dollars) | .03827 | N.A. | Passenger fuel expense per ASM (dollars) | .01082 | N.A. | Total passenger expense per ASM (dollars) | .04909 | .04951 | Percent change in nonfuel operating expense per ASM (percent) | 8.13 | N.A. | Projected change in nonfuel expense from April 1, 1979 to April 1, 1980 6 | 8.13 | N.A. | Estimated change in fuel cost, year ended September 1979 average to April 1, 1980 14 | 73.06 | N.A. | Nonfuel operating expense per ASM at April 1, 1980 7 (dollars) | .04474 | N.A. | Fuel expense per ASM at April 1, 1980 7 (dollars) | .02257 | N.A. | Total expense per ASM at April 1, 1980 7 (dollars) | .06731 | 15 .06782 | Year ended March 1977 | Total operating expense 1 (millions) | $11,726 | $1,520 | $13,316 | $13,601 | Less: | All-cargo expense 2 | 238 | 238 | 238 | Belly offset 3 | 729 | 96 | 825 | 865 | Nonscheduled 4 | 220 | 35 | 225 | 266 | Transport related 5 | 427 | 111 | 538 | 554 | Passenger operating expense | 10,112 | 1,348 | 11,460 | 11,678 | Passenger fuel cost | 2,190 | 230 | 2,420 | N.A. | Scheduled service ASM's (mils.) | 239,593 | 23,428 | 263,021 | 265,837 | Operating expense per ASM (dollars) | .04221 | .05754 | .04357 | .04393 | Projected expense per ASM (dollars) as at July 1, 1977 13 | .04593 | Projected operating expense per ASM as at April 1, 1980 (page 1) (dollars) | .06782 | Ceiling adjustment factor 8 (percent) | 47.66 |
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| D.P.F.I. formula effective July 15, 1977 12: | Terminal charge | $16.16 | Plus | .0884/mile (0-500 miles). | Plus | .0674/mile (501-1,500 miles). | Plus | .0648/mile (over 1,500 miles). | Ceiling formula through April 30, 1980 9: | Terminal charge | $23.86 | Plus | .1305/mile (0-500 miles). | Plus | .0995/mile (501-1,500 miles). | Plus | .0957/mile (over 1,500 miles). |
1 Total operating expense for all operations and service (in millions).
2 Scheduled all-cargo operations expense.
3 Total scheduled-service cargo revenue, less scheduled all-cargo operations revenue, carried as a by-product in aircraft belly compartments. Includes freight, express, priority and non-priority U.S. mail, and excess baggage.
4 Total non-scheduled revenues times 0.95, assuming charter operations would only be conducted at a profit.
5 Total transport-related expense, less any excess of expense over total transport-related revenues.
6 We here project costs from April 1, 1979 (the midpoint of the data year ended September 1979) to April 1, 1980 the resultant increase factor effective through April 30, 1980.
7 Operating expense per ASM for year-ended September, 1979, times projected change.
8 Projected operating expense per ASM on April 1, 1980 divided by the operating expense as at July 1, 1977.
9 Adjustment results in a 2.5 percent increase in level over current January 1, 1980 factor.
10 Additional rental expense that would have been incurred had leases not been capitalized under FASB-13, less actual amortization of capitalized lease expense.
11 Total fuel cost, scheduled service, times complement of rate of All-Cargo expense to total Operating Expense.
12 Order 77-7-26.
13 Year ended March, 1977 cost per ASM, times cost escalation factor of 1.04543 (to July 5, 1977). See DPFI workpapers, Y.E. March, 1977.
14 Estimated average cost per gallon for the trunk plus local service carriers at April 1, 1980, divided by the average for the year ended September, 1979 (48.33¢).
15 Change in Trunks plus Locals cost per ASM as at April 1, 1980, to year ended September, 1979 times total Psgr/Cargo cost for the year ended September, 1979.
16 Includes Alaskan, Hawaiian and other regional carriers.