Infrastructure Costs And Cheap Air Tickets

There are number of factors which influence the pricing of tickets of airlines. The various heads of expenses could be divided into two: the fixed and the variable costs. The costs which are recurring in nature are essentially the operational costs to the airlines. It is these operational costs which are the primary focus for the reduction of prices for providing the cheap air tickets. However, IATA has also begun to focus more on the expenditures of capital nature which are written off over a period of time. These include the infrastructure costs of developing the airport. With many countries undertaking either the modernization and expansion plans for the airports or developing the new ones, there is no doubt that the costs are bound to increase and this is the primary concern of IATA.

Let us first examine what all forms the infrastructural costs and how does it affect the ticketing. The construction of the airport or its terminal and the runways, the lounges and the different types of machineries and equipment for better customer services and a number of other facilities required for the operation and management of airline operations, all add to the infrastructure costs. Normally, it is the respective countries which are responsible for the development of airports but with many countries reporting high costs of development of infrastructure, it has become quite a serious issue since the price rise will adversely affect the ticketing of the international flights. In times when IATA is striving hard to bring in more transparent and simpler cost structure for the ticketing, it becomes important to keep the costs of infrastructure low since a steep escalation will result in negation of the effect of the efficiencies of operations achieved over the years of painstaking effort.

It is not just the inflation which results in the increasing the costs but also the way these incurred capital costs are apportioned over a period of time. If the number of years over which these are to be distributed are less than the reasonable timeframe, then it means a steep rise in the costs are likely which will be transferred to the airlines as different types of charges such as terminal charges (parking and boarding charges),security charges, noise charges, ATC charges and other information services charges. The efforts are made to ensure that all the factors which drive up the costs due to inflationary pressures are kept under control and these costs are apportioned over a reasonable length of time. All these efforts seek to provide the people with cheap international flights and to tap the potential of markets with low airfares.

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