Activity-based costing: the right solution for Winair? Appendices

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Appendices

Activity-based costing: the

right solution for Winair?

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Appendix A: The organizational chart of Winair

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II Appendix B: Defining appropriate cost categories Winair for ABC model.

Original cost categories

Total

(NAF) Direct/ Name of indirect

Indirect cost category

Flying operations

FUEL & OIL AIRCRAFT 2.423.353 Direct

FUEL ISLANDER 463.620 Direct

OPERATIONAL COMMUNICATION 483.610 Direct Operational Communication

CREW TRAVEL & LODGING EXP 15.325 Direct Crew travel & lodging

OTHER CREW EXPENSES 670 Direct Crew travel & lodging

FUEL & OIL RAMP EQUIPMENT 8.184 Indirect Ramp equipment

INSURANCE PREMIUMS HULL TO - Direct In Hull & Liability

INSURANCE PREMIUMS HULL ISLANDER - Direct In Hull & Liability

HULL & LIABILTY INSURANCE TO 17.900 Direct

HULL & LIABILTY INSURANCE ISLANDER 0 Direct

INSURANCE PREMIUM LIABILITY TO 416.891 Direct

INSURANCE PREMIUM LIABILITY ISLANDER 127.526 Direct

AIRCRAFT LEASE TO 2.108.620 Direct

AIRCRAFT LEASE ISLANDER 284.968 Direct

ENGINE RESERVE TO 1.907.817 Direct

ENGINE RESERVE ISLANDER

MAINTENANCE

DIRECT MAINTENANCE A/C 232.249 Indirect 95% Consumables, 5% rotables

DIRECT MAINT.AIRPLANES 838.258 Indirect 95% Consumables, 5% rotables

OVERHAUL ROTABLES 587.613 Indirect Rotables

OVERHAUL TOOLS 3.641 Indirect Auxiliary material

FREIGHT 118.178 Indirect Rotables 60% / consumables 40%

AUXILIARY MATERIAL 68.462 Indirect Auxiliary material

MAINT.GROUND EQUIPMENT 11.181 Indirect Maintenance Ground equipment

Aircraft and traffic services

LANDING/NAVIGATION FEES 1.880.387 Direct

HANDLING FEES 1.827.419 Direct

OTHER HANDLING EXPENSES 145.831 Direct

HANDLING FEE & EXPS CARGO 11.828 Direct

FLIGHT DELAY & CANCEL.EXP 91.393 Direct

OTHER FLIGHT & FLEET EXP. 50.089 Direct

PASSENGER & BAGGAGE CLAIM 162.577 Direct

CHARTER EXPENSES 3.355.732 Direct

STATION EXPENSES 156.837 Direct

OTHER TRAFFIC EXPENSES 41.605 Direct

PASSENGER SCREENING 1.522.010 Indirect Passenger screening

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III

Total

ADVERTISING & PROMOTION 162.372 Indirect Marketing costs

REPRESENTATION EXPENSES 53.722 Indirect Marketing costs

OTHER REPRESENTATION EXP. 4.186 Indirect Marketing costs

TICKET SALES COMMISSION 1.127.504 Direct Ticket sales commission

CARGO SALES COMMISSION 4.288 Direct Ticket sales commission

INTERLINE COMMISSION 49.673 Direct

BSP PROCESSING FEES 148.817 Direct

Personnel expenses

SALARIES 5.733.238 Indirect Personnel costs

PARTIMERS - Indirect Personnel costs

OTHER SALARY & SOC.EXPENS 787.764 Indirect Personnel costs

OVERTIME 447.595 Indirect Personnel costs

ALLOWANCE AOV/AWW 437.107 Indirect Personnel costs

SVB ZV/OV PREMIUM 334.510 Indirect Personnel costs

AVBZ PREMIUM 61.185 Indirect Personnel costs

Cessentia Expense 18.236 Indirect Personnel costs

PERSONNEL MEDICAL INSURAN 165.040 Indirect Personnel costs

MEAL ALLOWANCES 89.376 Indirect Personnel costs

UNIFORM EXPENSES 27.421 Indirect Personnel costs

TRAINING EXPENSES 110.668 Indirect Personnel costs

EXPAT TAX 334.122 Indirect Personnel costs

OTHER PERSONNEL EXPENSES 464.186 Indirect Personnel costs

Total 9.010.449

General and administrative costs

MAINTENANCE BUILDING 14.214 Indirect Housing costs

INSURANCE PREMIUMS GENER. 55.361 Indirect Housing costs

RENT EQUIPMENT 12.433 Indirect Housing costs

CLEANING BUILDING & SUPPL 41.766 Indirect Housing costs

ELECTRICITY 171.754 Indirect Housing costs

WATER 9.780 Indirect Housing costs

LEASE EQUIPMENT - Indirect Housing costs

LONG LEASE LAND 21.480 Indirect Housing costs

OTHER HOUSING EXPENSES 4.481 Indirect Housing costs

MAINT.OFF.FURN.& EQUIPMNT 82.323 Indirect Off. furniture + equipment

RENT BUILDINGS AIRPORT 110.084 Indirect offices airport

ACCOUNTING FEES 136.935 Indirect Accounting costs

PROFFESSIONAL SERVICES 633.780 Indirect Consultation costs

LEGAL FEES 90.803 Indirect Consultation costs

BOARD OF DIRECTORS FEES 61.098 Indirect Consultation costs

WORK THIRD PARTIES 318.251 Indirect Work third parties

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IV

Total

CAR EXPENSES 50.180 Indirect Travel expenses

LODGING/ACCOMMODATION 8.423 Indirect Travel expenses

OFFICE SUPPLIES 20.044 Indirect Other station expenses

STAMPS & COURIER SERVICES 135.907 Indirect Indirect office costs

COPYING EXPENSES 5.291 Indirect Indirect office costs

PRINTING EXPENSES 153.825 Indirect Other station expenses

COMPUTER EXPENSES 11.538 Indirect Indirect office costs

TELEPHON/FAX EXPENSES 329.850 Indirect Telephone/fax exp.

OTHER COMMUNICATION EXPEN 1.950.532 Direct BSP / GDS costs

COMMUNICATION USAIRWAYS 15.445 Direct BSP / GDS costs

SUBSCRIPTIONS/MEMBERSHIPS 135.351 Indirect Subscription costs

DEPRECIATION 393.702 Indirect Depreciation

BANKCHARGES 498.211 Indirect Credit card commissions. 35%

Ticket sales commissions 35%

Bankcharges 30%

REVENUE ADJUSTMENTS 15.104 Direct

BAD DEBTS EXPENSE 988 Direct

OTHER EXPENSES 11.317 Direct

CASH DIFFERENCES 63.207- Direct

CURRENCY EXCHANGE DIFFERC 20.307 Direct

MISCELLANEOUS EXPENSES 365 Direct

EXACT DIFFERENCE ACCOUNT 770- Direct

TB Total - Miscellaneous 31.989- Direct Miscellaneous

Grand Total 35.199.053

Extra explanation table:

- All figures are in Netherlands Antillean guilders (NAF).

- In the third column is stated whether the cost category is an indirect cost category, or a direct cost category.

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V Appendix C: Discussion of the flowchart of the process and the value chain of Winair In this appendix the business process and the value chain of Winair are discussed. This discussion leads to the identification of the main activities of Winair. The discussion starts with the flowchart, in the second part the value chain is discussed.

In Appendix D, the flowchart of the business process of Winair is depicted. There is made a distinction between the core business process and the secondary process. Furthermore, the parts of the process that are performed by third parties, but are part of the core process, are also in the flowchart.

The first step in the business process are marketing and sales activities. Marketing/ sales activities are performed to increase the sales of the tickets. Examples of marketing activities are advertising, activities at fairs, and other promotional activities. The core process starts with the reservations of the tickets. A part of the reservations is done by third party travel agents; however Winair itself also has a reservation department. This department can be seen as a sort of call centre, employees are taking in reservations that come in either by telephone or by email. The second step in the process consists of the ticketing department. Customers come to this department to pay for their reservation and receive their tickets. It is also possible for customers to make a reservation directly at the ticketing department. The control department supports and controls the reservation and ticketing departments. The first task of control is to check whether flights are not overbooked, because reservation for tickets can be made at three different places (reservations, ticketing and travel agencies). They also keep in touch with the flight scheduling department. Control checks if the schedule is still the same, when it is changed they have to contact ticketing and reservations. They also suggest changes to flight scheduling if they see that demand is higher than the supply for a specific flight. The third task of the control department is to check the payments that are made for the tickets. Reservations, ticketing and control are under the supervision of the customer service supervisors.

Flight scheduling makes the flight schedule with the help of a computerized system. The flight schedule is based on historical records, recent developments in demand and man made adjustments. Subsequently, the flight schedule is provided to the control department and consequently to flight dispatch, which is part of ground operations. Flight dispatch is responsible for the dispatch of the flights, they make the load sheets for the flights, communicate with the pilots, reroute flights, order fuel, fill in statistic sheets about the flights, make prognostics for the following day and merge flights.

The next step in the business process are the actual flights. The checking-in on the various airports and the boarding process are performed by a third party. However, Winair has a station manager and 3 supervisors at the Juliana Airport to supervise the third party, these employees belong to passenger handling, a part of customer service. Other activities of passenger handling are dealing with all the customer issues or complaints. At Juliana Airport St. Maarten the loading and unloading of the aircraft is done by Winair itself. Loading is part of the ground operations department. At the other airports the loading is done by third parties. The following step in the business process consists of performing the scheduled flights. The flights are either done by a Twin Otter (19 passengers) or the Islander (7 passengers). The Twin Otter is flown by two pilots and the Islander by one pilot. The maintenance department performs the maintenance on the aircrafts, they perform regular checks on the aircrafts, repair defects, purchase new parts, prepare parts to go on aircrafts and wash the aircrafts.

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VI accounts payable, providing management, the board and auditors with requested information, paying the salaries and reconciling bank accounts. The revenue accounting department records revenues when the tickets are lifted. Tickets are lifted when passengers board to get on a flight. Revenue accounting provides management with information about the revenues. A second task is to bill other airlines for the tickets on Winair flights and check invoices from other airlines for tickets that Winair has sold on their flights.

Appendix E depicts the value chain of the activities of Winair. The value chain is based on the theories of Porter (1985) and is used to group the tasks that are described in the preceding paragraphs into homogeneous activities. Most of the tasks performed within Winair are already discussed in the above paragraph about the business process of Winair. There is a distinction between primary activities and support activities (Porter, 1985).

The first of the primary activities is marketing and sales. This activity is performed by the marketing department within Winair. The most important tasks within the marketing department are advertising and other promotional activities to increase the sales of the tickets. The next group of activities consists of merged tasks within the customer service department. The first activity within the customer service department is reserving tickets; this activity consists of all tasks performed to process reservation requests from customers by phone or email. The second activity within customer service is ticketing. Ticketing consists of all tasks performed to sell and reserve tickets in person to the customers. The third activity is control. This activity consists out of the following tasks: checking if flights are overbooked, checking flight schedule for changes, suggest changes in flight schedule, loading the new schedule and removing the old schedule, checking the payments made for the tickets. A fourth activity, passenger handling, also falls under the customer service department. Passenger handling consists of all tasks performed to deal with customer issues and complaints.

The following activities are performed by ground operations. Ground operations is split up in two activities: flight dispatch and loading. Flight dispatch consists of the following tasks: the dispatch of the flights, making load sheets, communication to the pilots, reroute flights, order fuel, fill in statistic sheets about the flights, make prognostics for the following day and merge flights. Loading consists of the loading and off-loading of the aircrafts at Juliana Airport. The last group of primary activities consist of the tasks performed to actually fly the airplanes. Hence, the tasks performed by the pilots and co-pilots to fly the two types of planes. This group is split up into two activities: flying the Twin Otter and flying the Islander.

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Customer Service Customer servicing: Flying: Primary Activities Support Activities

Appendix E: Activities within the value chain of Winair

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The end products

Appendix D: Flowchart of the business process of Winair

Core business process:

Secondary processes:

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Appendix F: Assigning the costs to the end products

Direct costs Indirect costs

Activities

SXM-ANU SXM-AXA SXM-EIS SXM-EUX SXM-NEV SXM-SAB SXM-SBH SXM-SKB ANU-MNI

Twin Otter Islander Islander Outsourced Twin Otter Islander Twin Otter Islander Operational communication

Fuel and oil ramp equipment Maintenance Flight, rotables Maintenance Flight, consumables Maintenance Fligth, Auxiliary Maintenance Gound equipment Passenger & Baggage claims Station expenses

Indirect a/t costs Passenger screening costs Promotions and advertising Personnel Pilots

Personnel Flight Department Personnel Flight scheduling

Personnel Flight Dispatch Personnel Loading Personnel Maintenance Personnel Customer Service Personnel Ticketing Personnel Control Personnel Reservations Personnel Finance

Personnel Revenue accounting Personnel Human Resources Personnel IT

Personnel Quality assurance Personnel safety quality security Consulting costs

Personnel general management Housing costs

Office furniture and equipment Indirect office costs

Other station expenses Telephone and fax expenses Travel expenses

Subscriptions / memberships Bank charges

GDS costs

Costs offices at airport Depreciation

Miscellaneous Accounting costs Work third parties

Marketing / Sales Reserving tickets Controlling Ticketing Loading Flight dispatch

Maintenance Twin Otter Quality insurance

Maintenance Islander

Maintenance Ground equipment Flying Twin Otter (SXM) Flying Islander (SXM) Flying Twin Otter (Rest) Flying Islander (Rest) Finance Passenger handling Revenue Accounting Flight scheduling Human Resources IT Quality Assurance

Safety, Quality and Security General management Fuel Twin Otter

Fuel Islander Crew travel / lodging Insurance Twin Otter Insurance Islander Aircraft lease TO Aircraft lease Islander Engine reserve TO

Engine reserve Islander Landing fees Twin Otter Landing fees Islander Navigation fees TO Navigation fees Islander Handling fees TO Handling fees Islander Other handling expenses

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Appendix I: Cost driver rates for the direct costs

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XIII Appendix J: Activity-Product-Dependence Matrix for Winair activities / end products

Products: Fly in g T w in O tt er ( S X M ) F ly in g I sl an d er ( S X M ) F ly in g T w in O tt er ( re st ) F ly in g I sl an d er ( re st ) F li g h t sc h ed u li n g F li g h t d is p at ch M ar k et in g a n d S al es R es er v in g t ic k et s T ic k et in g C o n tr o ll in g P as se n g er h an d li n g L o ad in g M ai n te n an ce T O M ai n te n an ce I sl an d er M ai n te n an ce g . eq u ip m en t R ev en u e ac co u n ti n g F in an ce H u m an r es o u rc es IT Q u al it y a ss u ra n ce S af et y , q u al it y ,S G en er al m an ag em en t

SXM-ANU (Twin Otter) X X X X X X X X X X X X X X

SXM-ANU (Islander) X X X X X X X X X X X X X X

SXM-AXA (Islander) X X X X X X X X X X X X X X

SXM-AXA (Outsourced) X X X X X X X X X X X

SXM-EIS (Twin Otter) X X X X X X X X X X X X X X

SXM-EUX (Twin Otter) X X X X X X X X X X X X X X

SXM-EUX (Islander) X X X X X X X X X X X X X X

SXM-NEV (Twin Otter) X X X X X X X X X X X X X X

SXM-SAB X X X X X X X X X X X X X X SXM-SBH (Twin Otter) X X X X X X X X X X X X X X SXM-SBH (Islander) X X X X X X X X X X X X X X SXM-SBH (Outsourced) X X X X X X X X X X X SXM-SKB X X X X X X X X X X X X X X ANU-MNI (Outsourced) X X X X X X X X X Activities:

Flying Twin Otter (SXM) X X X X X

Flying Islander (SXM) X X X X X

Flying Twin Otter (rest)

Flying Islander (rest)

Flight scheduling X X X Flight dispatch X X X X Marketing / Sales X X X X Reserving tickets X X X Ticketing X X X X Controlling X X X Passenger Handling X X X X Loading X X X Maintenance (TO) X X X X Maintenance(Isl) X X X X Maintenance g. equipment Revenue accounting X X Finance X X X Human resources X IT X Quality assurance X X Safety, Quality, d X X General management X X X X Total

Cost not assigned to the city

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XIV Appendix K: Activity-Product-Dependence Matrix for Winair activities / end products

Products: _Fly in g T w in O tt er ( S X M ) F ly in g I sl an d er ( S X M ) F ly in g T w in O tt er ( re st ) F ly in g I sl an d er ( re st ) F li g h t sc h ed u li n g F li g h t d is p at ch M ar k et in g a n d S al es R es er v in g t ic k et s T ic k et in g C o n tr o ll in g P as se n g er h an d li n g L o ad in g M ai n te n an ce T O M ai n te n an ce I sl an d er M ai n te n an ce g . eq u ip m en t R ev en u e ac co u n ti n g F in an ce H u m an r es o u rc es IT Q u al it y a ss u ra n ce S af et y , q u al it y ,S G en er al m an ag em en t

SXM-ANU (Twin Otter) 0,11 0,08 0,03 0,10 0,02 0,02 0,03 0,02 0,03 0,04 0,01 0,01 0,04 0,05

SXM-ANU (Islander) 0,05 0,01 0,00 0,01 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,01

SXM-AXA (Islander) 0,05 0,00 0,01 0,02 0,01 0,01 0,01 0,00 0,01 0,02 0,00 0,00 0,02 0,00

SXM-AXA (Outsourced) 0,02 0,07 0,09 0,03 0,03 0,07 0,03 0,07 0,01 0,00 0,02

SXM-EIS (Twin Otter) 0,16 0,09 0,05 0,11 0,07 0,07 0,05 0,06 0,05 0,06 0,02 0,02 0,06 0,07

SXM-EUX (Twin Otter) 0,13 0,08 0,10 0,08 0,18 0,18 0,10 0,15 0,10 0,12 0,03 0,02 0,12 0,13

SXM-EUX (Islander) 0,22 0,03 0,03 0,03 0,02 0,02 0,03 0,01 0,03 0,04 0,00 0,00 0,04 0,05

SXM-NEV (Twin Otter) 0,16 0,10 0,07 0,11 0,07 0,07 0,07 0,06 0,07 0,08 0,02 0,01 0,08 0,06

SXM-SAB 0,13 0,11 0,12 0,11 0,14 0,14 0,12 0,12 0,11 0,14 0,03 0,02 0,14 0,15 SXM-SBH (Twin Otter) 0,18 0,14 0,17 0,06 0,20 0,20 0,17 0,17 0,16 0,20 0,07 0,05 0,20 0,08 SXM-SBH (Islander) 0,68 0,14 0,16 0,05 0,07 0,07 0,16 0,06 0,16 0,20 0,02 0,02 0,20 0,08 SXM-SBH (Outsourced) 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 SXM-SKB 0,13 0,10 0,07 0,11 0,06 0,06 0,07 0,05 0,07 0,08 0,02 0,01 0,08 0,06 ANU-MNI (Outsourced) 0,09 0,11 0,11 0,13 0,13 0,11 0,03 0,02 0,23 Activities:

Flying Twin Otter (SXM) 1,00 0,03 0,03 0,37 0,03

Flying Islander (SXM) 1,00 0,00 0,01 0,05 0,00

Flying Twin Otter (rest)

Flying Islander (rest)

Flight scheduling 0,02 0,01 0,03 Flight dispatch 0,04 0,01 0,05 0,04 Marketing / Sales 0,03 0,05 0,02 0,06 Reserving tickets 0,01 0,03 0,15 Ticketing 0,02 0,01 0,03 0,03 Controlling 0,01 0,03 0,12 Passenger Handling 0,20 0,04 0,02 0,02 Loading 0,03 0,15 0,00 Maintenance (TO) 0,21 0,04 0,02 0,55 Maintenance (Isl.) 0,21 0,04 0,02 0,45 Maintenance g. equipment Revenue accounting 0,06 0,25 Finance 0,15 0,04 0,09 Human resources 0,04 IT Quality assurance 0,01 0,01 Safety, Quality, d 0,02 0,02 General management 0,25 0,20 0,03 0,07 Total 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00

Cost not assigned to the city

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XV Appendix L: Determining the first stage resource cost drivers and direct cost drivers

Indirect costs: first stage cost driver Total cost Direct costs: Final

Expense category: (NAF): cost driver Assigned to:

Flying operations:

D: Fuel Twin Otter 2.423.353,19 # of TO flying minutes Direct to city pairs D:Fuel Islander 463.620,15 # of ISL flying minutes Direct to city pairs

D: Crew travel and lodging 15.994,56 Actual costs All ANU-MNI

D: Insurance Twin Otter 433.891,10 # of flying minutes Direct to city pairs D: Insurance Islander 127.526,52 # of flying minutes Direct to city pairs D: Lease costs Twin Otter 2.108.620,00 # of flying minutes Direct to city pairs D: Lease costs Islander 284.968,00 # of flying minutes Direct to city pairs D: Engine reserve Twin Otter 1.629.791,00 # of flying minutes Direct to city pairs D: Engine reserve Islander 278.027,00 # of flying minutes Direct to city pairs

I: Operational communication 483.609,64 # of TO / ISL flights Flying TO (SXM), Flying Isl. (SXM) I: Fuel and oil ramp equipment 8.184,06 # of TO / ISL flights Flying TO (SXM), Flying Isl. (SXM)

Maintenance:

I: Consumables 1.064.252,61 Educated guess 35% Maintenance TO, 65% Maintenance Isl.

I: Rotables 712.045,31 Educated guess 60% Maintenance TO, 40% Maintenance Isl.

I: Auxiliary material 72.102,98 Educated guess 40% Maintenance TO, 60% Maintenance Isl. I: Maintenance Ground equipment 11.180,84 Direct to activity Maintenance ground equipment

Aircraft and traffic services:

D: Landing fees TO 754.461,88 # of flights TO, per city pair All city pairs D: Landing fees Isl. 122.516,11 # of flights Isl, per city pair All city pairs D: Navigation fees TO 696.350,66 # of flights TO, per city pair All city pairs

D: Navigation fees Isl. 89.640,63

# of flights ISL, per city

pair All city pairs

D: Handling fees TO 1.566.504,55 # of flights TO, per city pair All city pairs

D: Handling fees Isl. 270.169,07

# of flights ISL, per city

pair All city pairs

D: Other handling costs 145.830,52 Actual costs All appropriate city pairs (see consolidated) D: Flight delay expenses 91.393,09 Actual costs 60% SBH, 30% SAB, 10% rest: # of flights D: Other flight / fleet exp. 61.917,07 # of flying hours All city pairs (except outsourced)

D: Charter expenses 3.355.731,69 Actual costs All appropriate city pairs (see consolidated) D: P& B claim 162.577,13 Educated guess 60% SBH, 40% to rest based on # of flights D: Station expenses 156.837,18 Actual costs / # of flights All (see consolidated)

D: a / t services expenses 41.604,74 Educated guess 80% to Tortola, 20% rest based on # of flights I: Passenger screening 1.522.009,93 # of passengers (SXM) Flying TO (SXM), Flying Isl. (SXM)

Marketing and sales exp.:

I: Marketing costs 220.281,23 Direct to activity Marketing and sales D: Ticket sales commissions 1.306.166,76 Revenue allocation ratio All city pairs D: Interline commissions 49.673,00 Revenue allocation ratio All city pairs D: Credit card 174.374,02 Revenue allocation ratio All city pairs D: BSP processing fees 148.816,90 Revenue allocation ratio All city pairs

D: GDS costs 1.965.976,55 # of passengers All city pairs

Personnel expenses:

I: Pilots 2.880.325,70 Time spent Flying TO, Flying Islander

I: Flight support staff 255.116,53 Time spent Flying TO, Flying Islander, Flight dispatch

I: Maintenance 1.916.179,49 Time spent Maintenance TO, Maintenance Islander

I: Loading 398.751,69 Direct to activity Loading

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XVI Indirect costs: first

stage cost driver Total cost: Direct costs: Final

Expense category: (NAF) cost driver Assigned to:

I: Flight scheduling 56.820,23 Time spent Flight scheduling, Marketing, GM, Revenue a.

I: Reservations 78.611,16 Direct to activity Reserving tickets

I: Ticketing 253.389,74 Direct to activity Ticketing

I: Control 175.054,03 Direct to activity Controlling

I: Passenger handling 199.397,92 Direct to activity Passenger Handling I: Revenue accounting 999.926,70 Direct to activity Revenue accounting

I: Finance 419.326,86 Time spent Finance, Revenue accounting

I: Customer service 320.219,68 Time spent Mark, Reserv., Ticket., Cont., Pass., GM, IT

I: IT 10.093,74 Direct to activity IT

I: Quality assurance 102.556,76 Direct to activity Quality assurance

I: Safety, quality and security 71.834,60 Direct to activity Safety, quality and securtiy

I: Human resources 135.870,64 Direct to activity Human resources

I: General Management 336.389,17 Time spent GM, Mark., FD., Maint., Fin., Tic., Res., Cont.

General administrative:

D: Other station expenses 173.869,30 # of flights All city pairs D: Miscellaneous -31.988,70 revenue allocation ratio All city pairs

I: Housing costs 331.269,82 # of square meters All activities

I: Office furniture 82.322,71 Actual costs All appropriate activities (see consolidated) I: Office airport costs 110.084,40 Direct to activity Passenger Handling

I: Accounting costs 136.935,00 Direct to activity Finance

I: Consulting costs 785.680,64 Actual costs GM, Finance, Maintenance TO / ISL

I: Work third parties 318.251,13 Actual costs Mar, Res, Tic, Con, PH, Main, Rev, GM I: Indirect office costs 152.736,20 Educated guess 65% Maint., 25% revenue a., rest # of employ. I: Travel expenses 220.647,48 Actual costs All appropriate activities (see cost. dr. input) I: Telephone/ fax expenses 329.850,04 Educated guess ti 2% re 10% co 10% mar 10% fin 5% fs 5%

rev 3% HR 5% Fd 15% Gm 25% Ma 25%

I: Subscription costs 135.351,22 Educated guess Main. 25% Pil. 25% FS 5% PH 15%

Mar. 5% FD 10% Rev15%

I: Bank charges 29.892,69 Educated guess 10 maint. To, 10 maint Isl, 80% rev all.

D: Depreciation and interest 393.702,28 Revenue allocation ratio All city pairs

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XVII Appendix M : Content of the interviews with the appropriate employees for every

activity

Interview Mr. Queeley (Manager Ground operations: Flight dispatch and loading) 1. Explanation of the Activity-based costing model, cost categories, activities,

end products and their relationships. This is done with the help of the model depictured in appendix F.

Could you describe your department in your own words (especially the flight dispatch part of ground operations)? What are the most important tasks of the employees within the flight dispatch department?

Ground operations deals with dispatching airplanes, coordinating schedules, loading and of loading of the aircrafts. Mr. Queeley supervises everything that is directly involved with operations: fuelling, communication with the pilots, managing the ground crew, communication with the network stations if it relates to operations. Flight dispatch has to schedule the day by day planning, assign pilots to it, cancel and combine scheduled flights, and deal with delayed flights.

The flight dispatch department consists of five dispatchers: give / make flight plan, communicate with the pilots, communicate with maintenance.

The loading part of the ground operations department consists of sixteen ground crew employees and is supervised by Mr. Cabreja. They load and offload the aircrafts departing and arriving from Juliana Airport St. Maarten. They also do the handling for Insel air at the Juliana Airport.

2. Explanation of the relevant indirect cost categories in detail (See appendix N) Which cost categories are, according to you, (partly) caused by the flight dispatch department? (First show the first assessment of Mr. Hodge)

Mr. Queeley mainly agrees with the assessment made in cooperation with Mr. Hodge (see appendix G). He made some additions concerning how to split the personnel costs:

1. Flight dispatch employees, 100% of the personnel costs goes to the activity flight dispatch.

2. Loading employees (Ground crew), 100% of the personnel costs goes to the activity loading.

3. Personnel costs manager Queeley: 20% to the flight department, 50% to flight dispatch, 15% to the loading department, 15% to general management.

4. Personnel costs Mr. Cabreja (Supervisor loading) have to be split over loading, general management and customer service based on his own judgement

Is/Are one or more of the other activities (partly) performed to support your department? General management and the flight support department are supporting the flight dispatch department

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XVIII Can you divide the amount of time spent by your department over the city pairs:

The number of flights allocation ratio is a good allocation ratio.

Does the fuel burn rate differ significantly between the various city pairs?

Just minute variations between the city pairs. On average the Twin Otter burns 10 pounds per flying minute and the Islander 2,7 pounds per flying minutes.

Is there information available about the flight delays divided over the city pairs and the costs of the flight delays over the city pairs?

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XIX Interview Buncamper (Marketing, Customer service: reservations, ticketing, control, passenger handling)

1. Explanation of the Activity-based costing model, cost categories, activities, end products and their relationships. This is done with the help of the model depictured in appendix F.

Could you describe the marketing department in your own words? What are the different tasks of the employees in the marketing department?

The main objective of the marketing of Winair is to market the entire airline in various markets (not only the markets we fly) to increase revenues. The entire market of Winair can be roughly split into 4 submarkets: The island of St. Maarten, the region (north / east Caribbean islands to which Winair flies), the US market and the European market.

Winair uses 2 types of advertising: full pay or bartering. Bartering means that advertisements are paid for with tickets or freight. Advertisements are made in newspapers, in magazines and on the radio. Newspaper: mainly St. Maarten and St. Kitts. Advertising magazines: mostly regional magazines, and 2 magazines in Europe and the US.

A second marketing tool of Winair is to visit tourist fairs to promote flying with Winair to the neighbouring Islands. Most of the neighbouring islands of St. Maarten have no large airport, so the only way to reach those Islands from the US or Europe is to first fly to St. Maarten and than on a regional airline as Winair to an other island. These tourist fairs can be large and mainstream tourist fairs as for instance the large tourist fair ITB in Berlin, but Winair also visits smaller and subject specific fairs as for instance a diving fair to promote flying to Saba. A third tool of Winair to sale tickets is that they have joined a global electronic (GDS) that is used by all large travel agencies and tour operators to sell tickets all over the world. A large portion of the total sales of Winair is made by third parties via the GDS-system.

Could you describe the customer service department in your own words (All stations, Ticketing, reservations and control, Cargo)?

Passenger handling: partly Mr. Buncamper, partly Mrs. Grace, 3 supervisors. Mainly at the Juliana airport building supervise the third parties who handle the passengers. They ensure that these third parties apply to contractual agreements and they communicate with the third parties on behave of Winair. They also handle customer issues and complaints.

Ticketing. Ticketing: Partly Mr. Buncamper, 3 ticketing employees. This department is placed within the Winair building close to the airport. In here customers can pick up and pay for their reserved tickets or make a reservation and pay for it directly.

Reservations. Partly MR. Buncamper, 6 reservation employees. This department is also placed within the Winair building. It is a sort of call centre. Customers (and travel agencies) from St. Maarten, the region, the US and Europe call or send e-mails to reserve tickets.

Control. Partly Mr. Buncamper, 6 control employees. This department monitors the flight schedule, ensures that the correct flights are in the system, verify that flights are not overbooked and cancel and delay flights.

2. Explanation of the relevant indirect cost categories in detail (See appendix N) Which cost categories are (partly) caused by the marketing and sales department? And what are the right proportions? (First show the first assessment)

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XX Could you divide your personal time spent over the following activities / departments:

Marketing /Sales: 25% Customer service: 40% Passenger handling 20% Reservations 5% Ticketing 5% Control 10% General management: 30% IT:5%

Could you divide the time spent by assistant grace over the activities: 70% passenger handling

30% marketing and sales

Which cost categories are (partly) caused by the customer service department (split up: ticketing, reservations, control)? And what are the right proportions? (First show the assessment made in cooperation with Mr. Hodge)

Mr. Buncamper agrees with this split up, for the personnel costs: see above

Is marketing/ sales supported by one or more of the other activities / departments? Yes: IT, HR, Finance, General Management

Is customer service (split up: ticketing, reservations, control) supported by one or more of the other activities / departments?

Yes: for each of them IT, HR, Finance.

Could you divide the resources spent in the marketing department over the city pairs or other activities:

Low: 1-33 Medium: 34-67 High: 67-100

(22)

XXI According to Mr. Buncamper all city pairs should get a equal share of the marketing costs, because in all marketing activities and tools all the city pairs are shown equally. If he had to make a distinction, the bold ones on the last page are taken more of his time.

The total cost of the activity reservations will be directly assigned to the city pairs, based on the number of passengers per city pair. Do you think this is the correct way to assign the costs of reservations?

This is correct way to assign the costs

The total cost of the activity ticketing will be directly assigned to the city pairs, based on the number of passengers per city pair. Do you think this is the correct way to assign the costs of reservations?

This is correct way to assign costs

The total cost of the activity control will be assigned to the activities that are supported by the activity control. Which activities / departments are supported by control and in which proportions?

Wrong way, assign directly to the city pairs based on the number of flights

The total cost of the activity passenger handling will be directly assigned to the city pairs, based on the number of passengers per city pair. Do you think this is the correct way to assign the costs of reservations?

(23)

XXII Interview Mrs. Colbourne (Finance, Revenue Accounting)

Could you describe the finance and the revenue accounting department in your own words? What are the different tasks of the employees in these departments?

The revenue accounting department

Revenue accounting: processes all the sold tickets: By third parties (GDS, electronic network) or own tickets. Revenue split into two sections: revenue own tickets sales and interline revenues. Revenue accounting also processes incoming billings from other airlines, refunds for passengers. They control and check if tickets are paid. They calculate the correct amount of landings, establish amount of taxes that have to be paid (these taxes are collected by incorporating them in the ticket prices). Further, revenue accounting provides the financial department with journal entries to book revenues into the general ledger. The revenue accounting department consists of 13 employees and is supervised by Mrs. Colbourne

The finance department:

Accounts receivable (one employee): The ticket department gives the daily sales records to accounts receivable, then accounts receivable has to book these sales. Subsequently, revenue accounting checks if cash and sales balance, if this is not the case then there is an investigation. If the investigation is done, then finance is noticed. Some customers (mainly government entities) get credit, then accounts receivable has to bill those customers. Accounts receivable has to check if all credit card sales are processed correctly. They have to make sure that all credit card transactions are booked in the Winair system for all travel agencies that have Winair in stock. Moreover, accounts receivable has to check that credit card payments and cash sales payments are received on the Winair bank accounts.

Accounts payable (two employees): they process and check all the invoices that come in. Provide a weekly accounts payable to Mrs. Colbourne and Mr. Hodges. They have to print cheques for every invoice and then reconcile accounts payable. Furthermore they have to manually book in all incoming invoices, as a backup if system fails.

Bank accounts (one and a half employee): Winair has several different banks and bank accounts. These employees have to enter all deposit slips coming from the banks, enter all transfers and book all bank charges. They also deal with the sales that come from the GDS-system, book them and make sure that all money from all sales is collected. They provide management with daily/weekly bank balances. The other ‘half’ employee does the reconciling and makes the journal entries with credit cards.

Payroll (one employee): They get the monthly mutation from HR (additional, new employees, etc.) and then process the payroll (this takes about a week). Subsequently, Mrs. Colbourne has to check them back. Then they have to issue the checks for the employees.

Mrs. Colbourne: reviews all work of staff, check the entries that they make, approve all invoices before they are processed. Present management with financial statements.

2. Explanation of the relevant indirect cost categories in detail (See appendix N) Which cost categories are (partly) caused by the finance department? (show first assessment of Mr. Hodge)

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XXIII Finance: 50%

Revenue Accounting: 50%

Which cost categories are (partly) caused by the revenue accounting department? (show first assessment of mr. Hodge)

Mrs. Colbourne agrees with the assessment made in cooperation with Mr. Hodge (see appendix G). She made some additions concerning how to split her personal costs, as can be seen underneath the preceding question.

Could you divide the time spent within the finance department over the other departments / activities:

The division can be found in the matrix shown in appendix H, column finance.

Could you divide the time spent within the revenue accounting department over the other departments / activities:

The division can be found in the matrix shown in appendix H, column revenue accounting.

Is finance supported by one or more of the other activities / departments? Yes: HR, IT, Revenue accounting

(25)

XXIV Interview Mr. Duzong (Maintenance)

Could you describe your department in your own words? What are the most important tasks of the employees within your department?

Different types of employees:

Two helpers: They clean the work area One ground maintenance employee.

Christian: Part helper, part transportation. His job mainly consists of getting parts / tools from companies all over the island that are needed by the mechanics.

Jean: Shop keeper, he processes the import and export of parts

Gilbert, Jones and Jamal: junior mechanic, they help with the mechanics with maintenance work to the Twin Otter and Islanders.

Nine licensed mechanics. They perform maintenance and repairs to the aircraft and parts of the aircraft , they carry out inspections and install new parts.

Mr. Duzong: manager maintenance, supervises all maintenance duties.

2. Explanation of the relevant indirect cost categories in detail (See appendix N) Could you divide the amount of time spent by the maintenance department over the following activities:

Maintenance Twin Otter: 40% Maintenance Islander: 60%

Could you divide the amount of parts (consumables / rotables) used by the maintenance department over the two types of airplanes:

Rotables Twin Otter: 60% Islander: 40% Consumables: Twin Otter: 35% Islander: 65%

Could you divide the amount of time spent on the Twin Otter over maintenance that needs to be done based on the number of cycles and maintenance that needs to be done based on the number of block hours?

Twin Otter Maintenance, based on cycles: 90% Twin Otter Maintenance, based on block hours: 10%

Could you divide the amount of time spent on the Islander over maintenance that needs to be done based on the number of cycles and maintenance that needs to be done based on the number of block hours?

(26)

XXV Interview Mr. Oliver (Flight department / flight support)

Could you describe your department in your own words (especially the non-flying part)? What are the most important tasks of the employees within your department?

The main task of the flight support department is to ensure that pilots properly trained, ensuring that there are enough pilots to operate the schedule, that standard operating procedures are followed by pilots. The pilots use the flight support department if they have any problems. Flight support will discuss these problems with the management.

Examples of the tasks of flight support are: pre planning, talking to civil aviation, ensuring that medical statements and licenses are up to date.

The flight department consists of chief Pilot, mr. Oliver; his assistant Rolando who is responsible for most of the administrative tasks and Shagean who is a trainee.

2. Explanation of the relevant indirect cost categories in detail (See appendix N) Which cost categories are (partly) caused by flight support department? (show first assessment of mr. Hodge)

Mr. Oliver agrees with the assessment made in cooperation with Mr. Hodge (see appendix G). He made some additions concerning how to split his personal costs:

Flight support: 92,5% Flight dispatch: 7,5%

Can you divide the amount of time spent by your department (non flying part) over the following activities:

Antigua is causing a lot of problems, so Antigua is causing more costs than you would think based on number of flights. The Saba operation takes more than the average amount of time, because not every pilot can fly there. Tortola takes a little bit extra time for the over knighting. The rest takes as much time as would be expected based on the number of flights to each city pair.

Is/Are one or more of the other activities (partly) performed to support non flying part of your department?

Yes, part of: General management, IT, Human Resources and Finance

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XXVI Interview Mr. Richardson (flight scheduling)

Could you describe your department in your own words? What are the most important tasks of the employees within your department?

The flight scheduling department consists of just one employee Mr. Richardson. He has the following tasks:

1. Scheduling: Making a schedule, strategic planning, and long term flight schedule: This is his main job

2. New markets exploring, research if new routes are viable, if competitors are doing a good job.

3. Short term flight scheduling if things pop up, update US airways schedule to Winair schedule: assigning and updating code share flights with US airways.

4. Revenue management: projected demand, then feed this information to the flight schedule (Try to maximize revenue per seat and at the same time fill all seats).

2. Explanation of the relevant indirect cost categories in detail (See appendix N) Which cost categories are, according to you, (partly) caused by the activity flight scheduling? (First show the assessment made in cooperation with mr. Hodge)

Mr. Richardson agrees with the assessment made in cooperation with Mr. Hodge (see appendix G). He made some additions concerning how to split his personal costs:

Flight scheduling: 65% Marketing: 10%

General management / decision making: 7,5% Revenue accounting: 17,5%

Is/Are one or more of the other activities (partly) performed to support flight scheduling? Yes: IT, HRM, Finance

Does flight scheduling support one or more of the other activities? Yes: see division of time spent, given by Mr. Richardson

Could you divide your time spent on flight scheduling over the city pairs of Winair: The division of time is shown in appendix H, column Flight scheduling.

Could you give your best estimate of the flight times (block time) of each city pair:

(28)

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XXVIII Interview Mrs. Larmonie (Human resources)

Could you describe the Human Resources department in your own words? What are the most important tasks of the employees within your department?

- Recruiting of personnel, part time / full time. The other departments come to Human resources if they need personnel, they will give a job description. HR first posts it internally if someone wants to apply. Subsequently HR checks externally with agencies or newspapers.

- Complaints of personnel, HR investigates and looks how they can be of assistance. They consult all parties.

- HR facilitates the immigration process of employees. Mostly pilots and mechanics, this is a lengthy and tedious process to ensure that they can work at Winair.

- HR deals with application letters

- Insurances: social insurance / health insurances SVB, Nagico. HR makes requests to the insurance companies and revises changes for every employee that influences the social security.

- Compensation issues: Mediator between management and employees. Most employees are put in the salary scale model. In corporation with the management compensation decisions are made.

- Legal matters: termination of contracts: look into that if it is possible. For complicated matters third party legal counsels are consulted

- HR deals with the banks and assists employees with bank matters. Give recommendations if a loan request is feasible.

- Take care of exit of employees. Voluntary exit interviews are held. HR prepares recommendation letters, most of time this is a basic and standard letter.

- HR takes care of the pay slip, because of confidentiality this is not done by finance. Employee jubilation: look what a specific employee would like, personal things are more appreciated.

- HR prepares internal notices, they inform staff on holidays, days off, new employees, etc. They update the vacation days for all the employees. HR processes the sick leave administration.

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XXIX - HR makes and updates the job descriptions. They deal with the labor department: employee complaint issues, etc. Also in connection with work permits. Furthermore, they deal with the union and the airport (for all security passes)

- Send information to tax department. When there are changes of employee information, HR sends them to tax department

2. Explanation of the relevant indirect cost categories in detail (See appendix N) Which cost categories are, according to you, (partly) caused by the Human resources department? (First show the first assessment made in cooperation with mr. Hodge)

Mrs. Larmonie agrees with the assessment made in cooperation with Mr. Hodge (see appendix G).

Can you divide the amount of time spent by your department over the other departments: (First column: High, Medium, Low. Second column: L = 1-33, M = 34 – 66, H = 67 – 100

High/ Medium/ Low Assign points (0 – 100) Percentages

- Pilots High 90 40%

- Flight support staff Medium 65 2%

- Flight scheduling Low 25 1%

- Flight dispatch Medium 66 5%

- Loading High 95 15%

- Marketing & Sales Low 35 2%

- Reserving tickets 3%

- Ticketing High 95 3%

- Controlling 3%

- Passenger Handling 2%

- Maintenance Medium 60 6%

- Revenue accounting Medium 60 6%

- Finance Low 33 2%

- Human Resources

- IT Low 25 1%

- Quality assurance Low 10 1%

- Safety, quality and security Low 30 2%

- General management High 75 6%

Is/Are one or more of the other activities (partly) performed to support your department? Yes, IT and Finance

(31)

XXX Interview Mrs. Vlaanderen (Safety, Quality and security)

(This interview was held in Dutch, because Mrs. Vlaanderen is from the Netherlands)

1. Explanation of the Activity-based costing model, cost categories, activities, end products and their relationships. This is done with the help of the model depictured in appendix F.

Hoe zou jij jouw eigen activiteiten en taken omschrijven?

Wereldwijd zijn standaarden vastgelegd voor de airline industry, de IOSA rules zijn de belangrijkste. Mrs. Vlaanderen zorgt dat Winair daaraan voldoet, zodat ze certified IOSA worden. Verder zorgt Mrs. Vlaanderen voor al het verplichte materiaal voor de stations en zij zorgt dat iedereen voorzien is van de belangrijkste zaken.

Een andere taak van Mrs. Vlaanderen is het up daten van de security and safety manuals van Winair.

Meer gedetailleerde uitleg over de indirect cost categories

Welke indirecte kosten categorieën worden gedeeltelijk veroorzaakt door jouw activiteiten als Safety, Quality and Security manager? (First show the first assessment of mr. Hodge)

Mrs. Vlaanderen bevestigt de inschatting die gemaakt is in samenwerking met mr. Hodge (appendix G).

Kun je de tijd die jij zelf besteedt verdelen over de volgend activiteiten of stations?: (First column: High, Medium, Low. Second column: L = 1-33, M = 34 – 66, H = 67 – 100

High/ Medium/ Low Assign points (0 – 100) Percentages General/ management and

decision making Ground operations Station: St. Maarten Station: St. Barth’s Station: Statia Station: Saba Station: Antigua Station: Montserrat Station: Barbuda Station: Nevis Station: St. Kitts Station: Tortola Station: Anguilla

Mrs. Vlaanderen geeft aan dat haar tijd moeilijk op deze wijze is te verdelen. Na wat verder doorvragen blijkt dat haar werkzaamheden er voor zorgen dat Winair in staat is om alle vluchten uit te (mogen) voeren. De kosten voor safety, quality and security zullen dan ook worden toegerekend aan de cost objects op basis van het aantal vluchten.

Zijn er activiteiten die uitgevoerd worden door andere departments om jouw activiteiten te ondersteunen?

(32)

XXXI Interview Mr. Cabreja (Ground operations / Loading)

1. Explanation of the Activity-based costing model, cost categories, activities, end products and their relationships. This is done with the help of the model depictured in appendix F.

Could you describe the Ground operations department in your own words (especially the loading part)? What are the most important tasks of the employees within your department? 16 employees work in 4 shifts

Shift: 1 loader, 1 of-loader, 1 make up area: allocate bags, 1 in charge GPU: Busy periods: 1: assists allocate luggage and marshal the aircraft.

Mr. Cabreja: Supervise the loading department. Making sure no cargo gets lost. New employees: through third party, staffing company, not on permanent contracts.

2. Explanation of the relevant indirect cost categories in detail (See appendix N) Which cost categories are, according to you, (partly) caused by the Ground operations department? (First show the first assessment of mr. Hodge)

Mr. Cabreja agrees with the assessment made in cooperation with Mr. Hodge (see appendix G).

Could you divide the time spent by you personally over the following tasks. - Supervising / managing the loading department 85%

- Writing reports for general management 5% - Assisting customer service (Buncamper) 10%

Could you indicate for the following city pairs if the loading department spends more, less or the same amount of time on them as should be expected based on the number of flights of each city pair SXM-ANU More SXM-AXA SXM-DCF More SXM-EIS SXM-EUX More SXM-NEV SXM-SAB More SXM-SBH More SXM-SKB More

ANU-BBQ Only statistics (Is in time spent on writing reports) ANU-DCF Only statistics (Is in time spent on writing reports) ANU-MNI Only statistics (Is in time spent on writing reports)

ANU-NEV None

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XXXII

SAB-EUX None

NEV-SKB None

Is/Are one or more of the other activities by other departments (partly) performed to support your department?

Yes, HR, Finance, Mr. Queeley (flight dispatch)

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XXXIII Interview Roland (IT)

Could you divide the time you spend over the following activities / departments?(Low 0 - 33, Medium 34 – 66, High 67 – 100)

High/ Medium/ Low Percentages

- Pilots Low 5 0

- Flight support staff Low 12 3

- Flight scheduling Low 17 3

- Flight dispatch Low 22 4

- Loading Low 0 0

- Marketing & Sales Low 17 6

- Reserving tickets Medium 35 15

- Ticketing Low 12 3

- Controlling Low 30 12

- Passenger Handling Low12 2

- Maintenance Low 17 4

- Revenue accounting Medium 55 25

- Finance Medium 40 9

- Human Resources Low17 4

- Quality assurance Low10 2

- Safety, quality and security Low10 1

(35)

XXXIV Interview Mr. Boersma (Quality assurance)

(This interview was held in Dutch, because Mr. Boersma is from the Netherlands)

Kunt u uw tijd die uw besteed als quality manager verdelen over het ondersteunen van de maintenance van de Twin Otter en de maintenance van de Islander.

(36)

XXXV Appendix N: The indirect cost categories of Winair

Flying operations:

- Operational communication - Fuel and oil ramp equipment Maintenance:

- Maintenance flight equipment: rotables - Maintenance flight equipment: consumables - Maintenance flight equipment: Auxiliary material - Maintenance ground equipment

Aircraft and traffic services costs: - Passenger & Baggage claim - Station expenses

- Indirect a/t services costs - Passenger screening costs Marketing:

- Promotions and advertising Personnel costs

- Flight personnel (pilots and support staff) - Personnel maintenance

- Personnel marketing

- Personnel revenue accounting - Personnel ticketing

- Personnel control - Personnel reservation - Personnel finance

- Personnel human resources - Personnel IT

- Personnel quality assurance,

- Personnel safety, quality and security - Personnel general management - Personnel flight dispatch - Personnel loading - Flight scheduling

General and administrative costs

- Housing costs - Travel expenses

- Office furniture and equipment - Subscriptions / memberships

- Consulting fees - Bank charges

- Indirect office costs - GDS costs, direct cost a. Stamps and courier services - Costs offices at airport

b. Copying expenses - Depreciation

c. Computer expenses - Miscellaneous

- Other station expenses - Telephone and fax expenses a. Office supplies

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XXXVI Appendix O: Example cost calculation activity from ABC-model Winair

Intermediate activity 1

Maintenance Flight equipment

(Twin Otter)

Expense categories Proportion Amount (NAF)

Consumables 35,00% 372.488,41

Rotables 60,00% 427.227,19

Auxiliary materials 40,00% 28.841,19

Personnel maintenance 38,50% 737.729,10

Housing costs 18,07% 59.866,88

Office furniture and e. 5,13% 4.220,94

Indirect office costs 35,00% 53.457,67

Travel expenses 5,00% 11.032,37

Consulting costs 3,07% 24.111,78

Work third parties 22,00% 70.007,41

Telephone and fax exp. 7,00% 23.089,50

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XXXVII Appendix P: Example cost allocation city pair from ABC-model Winair

End product 5

St. Maarten - Tortola (Twin Otter)

Activities Proportion Amount (NAF)

D: Fuel Twin Otter 15,84% 383.879,58 D: Insurance TO 15,84% 68.732,01 D: Lease cost TO 15,84% 334.023,19 D: Engine reserve TO 15,84% 258.172,63 D: Landings fees TO 76.232,42 D: Navigation fees TO 64.086,23 D: Handling fees TO 158.370,16 D: Other handling exp. 19.240,85

D: Charter expenses 1.163,50

D: Flight delay exp. 0,94% 861,30 D: Other flight / fleet e. 12,59% 7.797,33 D: P& B Claim 3,11% 5.051,98

D: Station expenses 35.028,32

D: A / T services exp. 80,00% 33.283,79 D: Ticket sales com. 8,52% 111.233,94 D: Interline com. 8,52% 4.230,18 D: credit card com. 8,52% 14.849,80 D: BSP processing fees 8,52% 12.673,34

D: GDS costs 6,58% 129.344,47

D: Other station exp. 5,19% 9.021,45 D: Miscellaneous 8,52% -2.724,18

D: Bank charges 8,52% 10.182,72

A: Flying TO (SXM) 15,84% 1.061.578,92 A: Flight Scheduling 9,00% 9.939,15 A: Flight Dispatch 5,19% 27.295,65 A: Marketing and Sales 11,11% 55.962,73 A: Reserving tickets 6,58% 21.977,27 A: Ticketing 6,58% 15.406,78 A: Loading 4,94% 22.549,67 A: Controlling 5,19% 14.401,49 A: Passenger handling 5,68% 76.347,38 A: Maintenance Ground 6,33% 4.504,29 A: Revenue accounting 2,21% 13.616,89 A: Safety, Quality, Sec. 6,33% 5.282,16 A: General man. 7,00% 105.929,36 A: Finance 1,53% 9.865,27 D: Depr. + interest 8,52% 33.527,92 Total cost 3.212.919,93 Total revenues 2.553.071,00 Profit margin -659.848,93 Number of flights 1.508,00

Average cost per flight 2.130,58

Average revenue per flight 1.693,02

Total variable costs 959.981,87

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XXXVIII Appendix Q: Example cost allocation aircraft type from ABC-model Winair

End product Twin Otter

Direct costs /

Activities Proportion Amount (NAF)

D: Fuel Twin Otter 2.423.353,19

D: Insurance TO 433.891,10 D: Lease cost TO 2.108.620,00 D: Engine reserve TO 1.629.791,00 D: Landings fees TO 754.461,88 D: Navigation fees TO 696.350,66 D: Handling fees TO 1.566.504,55 D: Other handling exp. 96.514,58 D: Flight delay exp. 62.389,50 D: Other flight / fleet e. 49.222,95

D: P& B Claim 95.539,42

D: Station expenses 100.020,55 D: A / T services exp. 39.291,90 D: Ticket sales com. 976.585,76

D: Interline com. 37.139,17

D: credit card com. 130.374,76 D: BSP processing fees 111.266,39

D: GDS costs 1.448.736,10

D: Other station exp. 105.343,34

D: Miscellaneous -23.917,09

D: Bank charges 89.399,84

A: Flying TO (SXM) 6.701.530,44 A: Flight Scheduling 78.266,35

A: Flight Dispatch 318.730,88

A: Marketing and Sales 344.492,97 A: Reserving tickets 246.158,65 A: Ticketing 172.565,18 A: Loading 263.312,19 A: Controlling 168.166,02 A: Passenger handling 855.136,72 A: Maintenance Ground 52.596,48 A: Revenue accounting 119.550,35 A: Safety, Quality, Sec. 61.679,74

A: General man. 928.922,80 A: Finance 86.612,81 D: Depr. + interest 294.360,61 D: Charter expenses 1.999,21 Total cost 23.624.960,93 Total revenues 22.818.018,47 Profit margin -806.942,46 Number of flights 17.609

Average cost per flight 1.341,65 Average revenue per flight 1.295,82 Total variable costs 7.166.975,86 Variable cost per flight 407,01 Number of block hours 6.743,12

Cost per block hour 3.503,57

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