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I am working on a report for a small charter airline and I want to set a key performance indicator (KPI) to measure average hours flown.

Is there a practice in aviation field to consider optimum flight hours for an airplane? An arbitrary example: Let's say I have a Boeing 767 and I want to consider if that particular model is profitable (I know it depends on payload, routes, and many other things), does it have to make an average 300 hours per month?

Is there such thing in aviation?

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    $\begingroup$ Airplanes don't make money sitting on the ground, if you are asking for a "break even" point considering all costs for that aircraft it may be a very complicated answer because differing labor costs, maintenance, and even the age of the aircraft. $\endgroup$ – Ron Beyer Jul 27 '17 at 15:12
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I want to set a KPI to measure average hours flown.

You might want to check block hour:

(aviation) The time from the moment the aircraft door closes at departure of a revenue flight until the moment the aircraft door opens at the arrival gate following its landing. Block hours are the industry-standard measure of aircraft utilization.

(Emphasis mine.)

The Wikipedia article airline cost glossary lists very common terms and KPI's.

One of those terms that could also be applicable to your case (revenue passenger miles) was asked about here: Which aircraft type flies the most annual passenger-miles?

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Like you say, it depends on quite a few parameters. You would set up a cash flow Excel sheet with cash in/cash out per month:

Costs

  • Lease
  • Salaries
  • Operational costs including certification, licensing
  • Office/overhead
  • Fuel
  • Airport fees
  • Maintenance/consumables not covered by lease
  • Marketing.advertising

Revenue from ticket sales

  • Number of flights per day
  • Passenger load factor
  • Seasonal variations
  • Market price per ticket
  • Predicted market share

The companies that lease out aircraft would have filled out scenarios for you. Boeing and Airbus have departments that advise prospective customers on setting up airlines.

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  • $\begingroup$ i like your answer as well, but i can only chose one accepted answer so i chose @ymb1's answer. That being said, thank you for pointing me costs and revenue values $\endgroup$ – Atilla Arda Açıkgöz Jul 28 '17 at 5:54
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    $\begingroup$ No worries, glad to be of help. $\endgroup$ – Koyovis Jul 28 '17 at 6:51
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Is there a practice in aviation field to consider optimum flight hours for an airplane?

Im not really sure what you mean by optimum hours for an air frame but you could likely figure out a predicted up-time (usable and subsequently profitable) for an aircraft. You can start by assuming the aircraft is in the air all the time then subtract for the following,

  • Time to and from the gate
  • Time at the gate
  • If you are in a cold environment - de-ice and other similar pre-flight things
  • Scheduled maintenance
  • Some form multiplier for unscheduled maintenance issues (this number is easier to compute after some time of operation.
  • Time sitting un-used on the ground as there is no route or booking for the plane
  • Paying everyone involved (maintenance crew, pilots, flight crew etc)

small charter airline

For this you need to look at things like smaller turbo props as they have very different cost breakdowns than a 767.

If you are here in the USA you also need to identify if you are planning to operate a 135 or 121 airline as the governing and rules are somewhat different which will impact cost.

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  • $\begingroup$ Did you mean cabin crew not flight crew in your last bullet point? Flight crew typically includes the pilots, plus e.g. flight engineer, but cabin crew is commonly discussed separately... $\endgroup$ – a CVn Jun 15 '18 at 11:00
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"optimum flight hours" is keeping the aircraft in the air except for mandatory maintenance.

In the 1940-1950 era a DC3 was considered to have a "good" route if it was in the air 2-3 out of 24hrs.

Today, airlines keep aircraft out of the gate closer to 16 out of 24hrs.

Total Airline Operating Cost Breakdown
======================================
44% is operating, includes fuel, direct maintenance, depreciation, and crew
29% is servicing expense, aircraft, traffic, passenger
14% is reservations and sales expense
13% is overhead expense, adds and admin

Cost per block-hour of operations 
==================================
B757-200 (avg. 186 seats)
Based on 1252 mile average stage length and 11.3 block-hr daily utilization 
CREW $  489
FUEL $  548
MAINTENANCE $  590
OWNERSHIP $  923
--------------------------
TOTAL $ 2,550 per block-hr

Typical costs per block hr

A/C        Seats   blk/Hr   seat/hr
===================================
DC9-30     100     $1,973    $19.73       
A320       148     $2,270    $15.33      
B727-200   150     $2,555    $17.03     
B757-200   186     $2,550    $13.71      
B747-400   375     $6,455    $17.21 

Source

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