FullDescription:Economics

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Aircraft operating costs

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Term aircraft operating costs
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Abbreviation

Definition

Flight and ground costs that are linked to the operation of an aircraft, such as fuel, crew, landing fees, ground handling, aircraft parking, air bridges, maintenance.

Definition Source

EUROCONTROL (2013) Standard Inputs for EUROCONTROL Cost Benefit Analyses, Edition: 6.0

Note

Lexicon Release

Lexicon Release 2016.1

Aircraft ownership cost

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Term aircraft ownership cost
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Abbreviation

Definition

The unitised cost of posession of an aircraft, whether it be a depreciation (D), rental (R) or leasing charge.

Definition Source

EUROCONTROL (2013) Standard Inputs for EUROCONTROL Cost Benefit Analyses, Edition: 6.0

Note

Lexicon Release

Lexicon Release 2016.1

Assessment of costs and benefits

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Term assessment of costs and benefits
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cost-benefit assessment

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cost-benefit analysis (CBA)

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Abbreviation

ACB

Definition

a process to identify costs and benefits that will subsequently be used in a cost-benefit analysis. Ideally, values of the costs and benefits are also provided.

Definition Source

SESAR, Project ID 16.06.06 D06-01 07 - Guidelines for Assessing Costs and Benefits

Note

An ACB is carried out when a project is providing cost and benefit inputs to a CBA that is being performed in another project (often SESAR 16.06.06)

Guidelines for Assessing Costs and Benefits are available. They provide guidance to primary and federating (operational and systems) projects on providing cost and benefit inputs to P16.06.06

Lexicon Release

Lexicon Release 2015.2

Asset life

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Term asset life
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Definition

The accounting period in years for a given asset used in deriving the amortisation of investment expenditure

Definition Source

EUROCONTROL (2013) Standard Inputs for EUROCONTROL Cost Benefit Analyses, Edition: 6.0

Note

Lexicon Release

Lexicon Release 2015.2

Benefit

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Term benefit
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cost-benefit analysis (CBA)

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benefit category

benefit mechanism

benefit uncertainties

Abbreviation

Definition

a positive impact of monetary value to stakeholders.

Definition Source

SESAR Project ID 16.06.06 D26-01, Ed. 00.02.01 - ATM CBA for Beginners

Note

Within a CBA, benefits should cover costs for the project to be economically viable. Examples of benefits are additional revenues or cost savings to stakeholders.

Lexicon Release

Lexicon Release 2015.2

Benefit category

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Term benefit category
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benefit

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Abbreviation

Definition

high level category used to group benefits in the cost-benefit analysis (CBA)

Definition Source

SESAR Project ID 16.06.06 D26_03 Ed. 03.00.00, Oct 2014, Method to assess costs and benefits for CBAs

Note

Lexicon Release

Lexicon Release 2015.2

Benefit mechanism

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Term benefit mechanism
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benefit

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Abbreviation

Definition

Within a cost-benefit analysis (CBA), benefit mechanisms are a cause-effect description of the improvement proposed by the project. They show how benefits are delivered.

Definition Source

SESAR Project ID 16.06.06 D26-01, Ed. 00.02.01, Oct 2014 - ATM CBA for Beginners

Note

A benefit mechanism can be described in a script text format as a set of arguments or in a graphical and more formalized way using influence diagrams and models.

It documents the changes that an action introduces into the ATM environment and how those changes lead to benefits. Often includes assumptions and/or options.

Lexicon Release

Lexicon Release 2015.2

Benefit uncertainties

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Term benefit uncertainties
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cost-benefit analysis (CBA)

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benefit

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Abbreviation

Definition

Figures that are needed to calculate the values of the benefits in the CBA model, but which are not precisely known. They are captured in ranges with low, base and high values.

Definition Source

SESAR Project ID 16.06.06 D26_03 Ed. 03.00.00, Oct 2014, Method to assess costs and benefits for CBAs

Note

Lexicon Release

Lexicon Release 2015.2

Cargo load factor

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Term cargo load factor
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passenger load factor

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Abbreviation

Definition

the percentage of cargo space filled by paid cargo.

Definition Source

EUROCONTROL (2013) Standard Inputs for EUROCONTROL Cost Benefit Analyses, Edition: 6.0

Note

Lexicon Release

Lexicon Release 2015.2

Cash flow

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Term cash flow
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Abbreviation

Definition

1. (related to organisations) "The movement of cash and cash equivalents into and out of the organisation."

2. (project-related) "the difference between the cash inflows and outflows related to the project during the time horizon in which they occur."

Definition Source

1. EUROCONTROL (1999) Principles for establishing the cost-base for route facility charges and the calculation of the unit rates

2. SESAR Project ID 16.06.06 D06-05 - ATM CBA for Beginners

Note

Costs of the project lead to cash outflows and benefits to cash inflows.

Lexicon Release

Lexicon Release 2015.2

Cost category

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Term cost category
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cost

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Abbreviation

Definition

high level category used to group costs in the cost-benefit analysis (CBA)

Definition Source

SESAR Project ID 16.06.06 D26-03 07 (October 2014) Method to Assess Costs and Benefits for CBAs

Note

Lexicon Release

Lexicon Release 2015.2

Cost mechanism

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Term cost mechanism
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Cost category

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Abbreviation

Definition

a description of the potential costs of the project broken down into relevant cost categories (e.g. investment, operating).

Definition Source

SESAR Project ID 16.06.06 D26-01 (October 2014) - ATM CBA for Beginners

Note

Lexicon Release

Lexicon Release 2015.2

Cost-benefit analysis

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Term cost-benefit analysis
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assessment of costs and benefits

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Abbreviation

CBA

Definition

1) An evaluation method that provides a logical and consistent framework for assessing a particular option or options. A CBA gives an indication of the total economic welfare effects of a project by comparing all costs and benefits.


2) A formal discipline used to help appraise, or assess, the case for a project or proposal. This is achieved by weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option.

Definition Source

1) ICAO, DOC 9829 Guidance on the Balanced Approach to Aircraft Noise Management 2008, 2nd ed., p. (v)

2) EUROCONTROL (2008) Airport CDM Implementation Manual [1]

Note

Marginal crew costs

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Term marginal crew costs
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Abbreviation

Definition

the cost of crewing for additional minutes over and above those planned at the strategic phase.

Definition Source

University of Westminster (2008) Innovative Cooperative Actions of R&D in EUROCONTROL Programme CARE INO III, Dynamic Cost Indexing [2]

Note

Marginal crew costs are appropriate for the cost index context. [...] These costs are derived from a detailed examination of payment mechanisms for aircraft crew, with reference to current salary ranges. (same source)

Lexicon Release

Lexicon Release 2015.2

Net Present Value risk profile

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Term Net Present Value risk profile
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NPV risk profile

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Net Present Value (NPV)

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Abbreviation

Definition

the range of values the NPV of the project might take, along with the associated cumulative probabilities.

Definition Source

SESAR Project ID 16.06.06 D26-01 (October 2014) - ATM CBA for Beginners

Note

Lexicon Release

Lexicon Release 2015.2

Passenger load factor

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Term passenger load factor
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SESAR

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cargo load factor

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Abbreviation

Definition

(in the airline industry) the percentage of seats filled by fare-paying passengers.

Definition Source

EUROCONTROL (2011) Standard Inputs for EUROCONTROL Cost Benefit Analyses, Edition: 5.0, using a definition from Financial Times Lexicon [3]

Note

Definition from EUROCONTROL Performance Review Report 2011: Revenue passenger-kilometres (RPK) divided by the number of available seat-kilometres (ASK).

Passenger opportunity cost

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Term Passenger opportunity cost
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Abbreviation

Definition

Lost future potential revenue from passengers who choose not to fly with a particular airline again as a consequence of delay currently experienced. This is assumed to be equivalent to the cost of delay to passengers.

Definition Source

EUROCONTROL (2013) Standard Inputs for EUROCONTROL Cost Benefit Analyses, Edition: 6.0

Note

Lexicon Release

Lexicon Release 2015.2

Time Value of Money

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Term Time Value of Money
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Abbreviation

TVM

Definition

Time Value of Money means that the same (nominal) amount of money received at different points in time has different value.

Definition Source

SESAR Project ID 16.06.06 D26-01 (October, 2014) - ATM CBA for Beginners

Note

An example: If a person receives EUR 100 today and invests it immediately, it will start to generate income immediately. If that person waits ten years before investing the EUR 100, he/she will lose ten years of income.

Thus, when talking about costs and benefits, two dimensions should always be specified: the amount of money as well as the point in time when a given money inflow or outflow occurs.

Lexicon Release

Lexicon Release 2015.2