Indirect Operating Cost

These are mainly marketing and administrative costs, which for the larger companies can be very high. Their spending on marketing and public relations includes promotional and publicity campaigns, points of sale at major commercial outlets in large cities around the world and rental and maintenance of exclusive areas at airports. There are four types of indirect operating costs.

Stopover costs which include station and ground costs, handling fees-and airport taxes.

Passenger service cost which includes in-flight catering, cabin crew salaries and expenses; overnight, accommodation costs for cabin crew and transit passengers and the cost of insurance.

Reservation cost which includes ticketing, the cost of retail shops and offices and commissions paid to travel agencies.