14 C.F.R. Example of SIFL Adjustment
Title 14 - Aeronautics and Space
[PS–92, 45 FR 24119, Apr. 9, 1980]
Title 14: Aeronautics and Space
PART 399—STATEMENTS OF GENERAL POLICY
Subpart C—Policies Relating to Rates and Tariffs
Example of SIFL Adjustment
[Methodology for determining change in operating expense per available seat-mile] [See footnotes at end of table]---------------------------------------------------------------------------------------------------------------- Total Year ended September 1979 Trunks Locals Trunks plus passenger/ locals cargo \16\----------------------------------------------------------------------------------------------------------------Total operating expense \1\ (millions)...................... $16,455 $2,522 $18,977 $19,384Less: 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 416Plus: Capitalized lease adjustment \10\..................... 119 2 121 121Passenger operating expense................................. 14,833 2,294 17,127 17,462Passenger 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 16,448Less: 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 454Plus: Capitalized lease adjustment \10\..................... 78 1 79 79Passenger operating expense................................. 12,396 1,799 14,195 14,470Passenger 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 .04951Percent change in nonfuel operating expense per ASM ........... ........... 8.13 N.A. (percent)..................................................Projected change in nonfuel expense from April 1, 1979 to ........... ........... 8.13 N.A. April 1, 1980 \6\..........................................Estimated change in fuel cost, year ended September 1979 ........... ........... 73.06 N.A. average to April 1, 1980 \14\.............................. ===================================================Nonfuel operating expense per ASM at April 1, 1980 \7\ ........... ........... .04474 N.A. (dollars)..................................................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 $13,601Less: 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 554Passenger operating expense................................. 10,112 1,348 11,460 11,678Passenger fuel cost......................................... 2,190 230 2,420 N.A.Scheduled service ASM's (mils.)............................. 239,593 23,428 263,021 265,837Operating expense per ASM (dollars)......................... .04221 .05754 .04357 .04393Projected expense per ASM (dollars) as at July 1, 1977 \13\. ........... ........... ........... .04593Projected operating expense per ASM as at April 1, 1980 ........... ........... ........... .06782 (page 1) (dollars).........................................Ceiling adjustment factor \8\ (percent)..................... ........... ........... ........... 47.66----------------------------------------------------------------------------------------------------------------
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.
