Advertisements

Cost of mistakes


Sorry for another airline related post!

  
I was on a flight recently from Dublin and as the above photo shows, there was a little incident on the taxi to takeoff. Two aircraft touched each other. The one I was on (above) incurred wing damage, the other one tail damage. I’m not going to try to guess who made a mistake, but someone did. So what did this mistake cost?
Let’s think of costs in a broad sense. Here is my thinking

  • Repair costs of both aircraft 
  • Lost revenue as aircraft are out of service 
  • Cost of renting replacement aircraft and crew
  • Cost of emergency services attending the incident
  • Customer service costs e.g. passenger refunds
  • Cost of buses to return passengers to the terminal 
  • Increased compliance costs to ensure such mistakes do not happen again.

And there may be more. I’m just using this incident as an illustration of how we need to think of costs in a broad sense.

Advertisements

Tags:

About martinjquinn

I am an accounting academic, accountant and author based near Dublin, Ireland.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: