ENGINEERING REPORT No.

: 10000161209/000/00
Subject : Date : 14 January 2021
Ref : *)
Attention : TE, MQ, OE
Prepared by : Dito Wijanarko Dito
Technical Delay and Cancellation Cost Calculation Wijanarko
2021-01-19
11:20:12
Checked by : Nazarullah Ibny Digitally signed
by Nazarullah
Ibny / 532180
Date: 2021.01.21
15:33:45 +07'00'

Iss. Auth. : Byoma Wing Argyoganendro

Digitally signed by
Byoma Wing A
Date: 2021.01.25
08:23:35 +07'00'

Distribution: TE, MQ, OE

*) Reference :
/a/ Garuda Indonesia Annual Report FY 2017
/b/ GMF AeroAsia Annual Report FY 2017
/c/ Engineering Report AG/00-00-0350/ER: Cost Standardization of Technical Delay / Cancellation

I. BACKGROUND EVENT
On-time performance of scheduled flights is regarded as one of the most important key performance indicators
in airline industry. One of its derivation is dispatch reliability, which measures the number of technical delays and
cancellation, in respective with aircraft revenue take-off, on different time basis (weekly, monthly, or YTD). This
technical delay and cancellation may be caused due to various factors: engineering aspect (world-wide reliability
issue, maintenance program unproper), or non-engineering aspect (aircraft planning and routing, material spare
availability). When there is a maintenance interval adjustment and / or design improvement, a cost and benefit
analysis need to be conducted. Concerned benefit is reduced flight interruption (technical delay and cancellation),
while required costs mostly consists of manhours and materials.

A study was conducted on 2013 to quantify flight interruption into “Technical Delay and Cancellation Costs” with
ER no. AG/00-00-0350/ER: Cost Standardization of Technical Delay / Cancellation. For refreshment purposes, this
ER will update its predecessor based on 2017 FY data.

II. DESCRIPTION
Since the cost and benefit analysis will be used for technical improvement, interruption discussed in this report is
only on ground interruption cased by maintenance action taken due to technical problem occurrence. Before
calculating each component of scheduled interruptions, each variable scope has to be determined:

Delay: an originating flight departs later than scheduled departure time (15+ minutes).
Cancellation: elimination of scheduled trip because of a known or suspected malfunction; flight which is cancelled
after having been delayed, is considered to be a cancellation only.

In delay cost impact, duration of the delayed event is a major cost driver while cancellation cost in loss passenger
revenue and wasted operational cost in a single flight, not as a function of time. Airline should spend extra
operational cost for each occurrence (fuel, crew, maintenance, and station). Besides operating costs, total
interruption cost should also include passenger’s time.

In cost and benefit analysis, to determine profit / loss of overall flight, improvement does not related to only one
flight, but in particular period of operation. Based on that fact, delay cost calculation will neglect non-linearity of
passenger cost against delay time and where the delay is taken (ground / taxi)

Form MZ-3-01.1 (2-11) Page 1 of 7

 ENGINEERING REPORT No. : 10000161209/000/00
III. ANALYSIS
A. Delay Cost Analysis
Flight delay costs consist of direct operational cost to airline and cost to air passenger. Refer to total delay cost
impact study in NEXTOR (2010), there are two common methods to convert flight delay into accountable costs,
depend on the available data or result accuracy requirement:

1. Cost Factor Approach

To fully account this method, it will require detailed delay data and cost factor for each cost category. The total
cost of flight delay to an airline can be obtained by adding the cost of delays to individual flights.
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑙𝑎𝑦 𝐶𝑜𝑠𝑡 = ∑ (𝑋𝑖 $⁄𝑚𝑖𝑛 ∗ 𝑌𝑖 𝑚𝑖𝑛)
𝑖
This method is not suitable to calculate multiple flight, because of each cost factor characteristics is needed on
each flights. In addition, it ignores interaction effect as reactionary delay impact of consecutive flights and detailed
operational knowledge is required.

2. Total Cost Approach

𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑙𝑎𝑦 𝐶𝑜𝑠𝑡 = 𝑇𝑜𝑡𝑎𝑙 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑐𝑜𝑠𝑡 ∗ 𝑝
In contrast to the previous method, total cost approach estimates delay cost from overall operational cost by using
a figure / ratio called p, where this figure may vary for each delay cost component (will be listed below). This is
more intended to cumulative of multiple delayed flights calculation. The data required is also not as detailed as
cost factor approach.

As the reliability improvement does not only concern on a single flight interruption and all operational data of
Garuda Indonesia Airlines (GIA) are available in GIA annual report and PT. GMF AeroAsia, Tbk. (GMF) annual report,
the total cost approach will be used.

B. Technical Delay Cost Components

There will be several technical delay cost components, on which will account into full costs per hours, and each
will have different p factor or ratio.

Prior to analyze each delay costs components, please see the following aircraft operation and flight interruptions
summary:

Table 1: Operation and Flight Interruption Summary for GA-Group Fleet

Operation
A320-200 B737-800 ATR72-600 CRJ-1000 B777-300 A330
Summary
A/C in Service 48 73 15 18 10 24
Flight Hours (FH) 118688 209388 26025 37166 42361 72143
Flight Cycle (FC) 86290 141217 28133 30377 5406 18152
Daily Flight-Hours
Utilization (in 448 483 307 372 873 623
minutes)
Daily Take-Off
5.43 5.43 5.53 5.06 1.86 2.61
Utilization
Take-off per Hour 1.38 1.48 0.93 1.23 7.82 3.98
Daily Ground Time 992 957 1133 1068 567 817
Ground Time /
182.69 176.24 204.88 211.07 304.84 313.03
Flight (in minutes)
Delayed Flight 238 472 71 168 27 90
Delay Duration (in
19912 53402 12679 23790 3182 18972
minutes)
Avg Delay Dur /
1.39 1.89 2.98 2.36 1.96 3.51
Flight (hours)

Form MZ-3-01.1 (2-11) Page 2 of 7

 ENGINEERING REPORT No. : 10000161209/000/00
Crew Delay Cost
Crew delay cost can be derived from total crew cost, rationed by operating hours and the number of its
operating crew.

Table 2: Crew Delay Cost per Hours

A320-200 B737-800 ATR72-600 CRJ-1000 B777-300 A330

Total Crew Cost $ 185,262,519.00
Flight Hours (FH) 118688 209388 26025 37166 42361 72143
Total Flight
6 6 2 3 14 12
Attendant
Total Flight Crew 2 2 2 2 2 2
Total Crew 8 8 4 5 16 14

Crew Operation Cost

366.30 366.30 366.30 366.30 366.30 366.30
per hour (for all fleet)
Crew Delay Cost /
$ 2,930.38 $ 2,930.38 $ 1,465.19 $ 1,831.49 $ 5,860.76 $ 5,128.16
Hours

Total Station Cost and User Charge

This component is based on Condition of Use for Soekarno-Hatta International Airport. Please note that most of
the charges are relied on aircraft MTOW.

Table 3: Total Station Cost and User Charge per Cycle

A320-200 B737-800 ATR72-600 CRJ-1000 B777-300 A330

Total Station Cost
382,651,073.00
and User Charge
MTOW 78.0 79.0 23.0 41.6 351.5 242.0
Landing Fee (1x) 321.4 325.9 78.9 161.1 1656.0 1117.1
Parking Fee (1x) 35.1 35.6 10.4 18.7 158.2 108.9
Parking Surcharge
0.1 0.1 0.0 0.1 0.6 0.4
(1x)
Aviobridge 37.0 37.0 37.0 37.0 175.0 155.0
Ground Time / Flight
182.7 176.2 204.9 211.1 304.8 313.0
(in minutes)
Flight Cycle (FC) 86,290 141,217 28,133 30,377 5,406 18,152

Total station cost and

36,209,397.55 59,871,602.67 3,793,431.51 7,074,902.62 11,815,698.49 27,589,035.40
user charge per fleet
Station cost and user
0.2 0.4 0.03 0.05 0.08 0.19
charge ratio
Total Station Cost
and User Charge / $ 1,097.13 $ 1,108.49 $ 352.54 $ 608.94 $ 5,714.54 $ 3,973.84
Cycle

Direct Maintenance Cost

A slightly different approach is used between Garuda and Citiink Fleet. For Citilink, overall maintenance costs is
derived from “GMF Revenue from Citilink” section in GA Annual Report FY 2017. For Garuda Indonesia fleet, we
have obtained PMB and Irregularities costs based on PBTH agreement, and only this will be account for
maintenance costs.

Direct maintenance costs for Citilink will be = GMF Revenue from Citilink / FH – yet this will be accounted / event
Direct maintenance costs for Garuda will be = TMB cost + Irregularities cost – per event

Form MZ-3-01.1 (2-11) Page 3 of 7

 ENGINEERING REPORT No. : 10000161209/000/00
Table 4: Direct Maintenance Cost

A320-200 B737-800 ATR72-600 CRJ-1000 B777-300 A330

TMB Cost - $ 18,815,282.66
GMF Revenue From
Citilink * assumed to $ 39,929,928.00 -
be PBTH for Citilink
Flight Hours (FH) 118688 209388 26025 37166 42361 72143
Direct Maintenance
Cost per Minutes (per $ 5.61 $ 0.81
Airline)
TMB Cost (per fleet) - $ 26.29 $ 3.27 $ 4.67 $ 5.32 $ 9.06
Irreguralities Cost per
- $ 120,000.00 $ 30,000.00 $ 18,000.00 $ 24,000.00 $ 72,000.00
year - from PBTH GA
Delayed Flight 238 472 71 168 27 90

Irreguralities Cost - $ 254.24 $ 422.54 $ 107.14 $ 888.89 $ 800.00

Direct Maintenance
$ 336.43 $ 280.53 $ 425.80 $ 111.81 $ 894.21 $ 809.06
Cost

Passenger Compensation Cost

In reference to Indonesia DGCA under PM 89 2015, should any technical delay occurred, a compensation must
be given to each passenger, as listed in table below:

Table 5: Regional Passenger Compensation Cost / Pax

Delay Criteria Compensation Base Cost Cumm. Cost

Category (min)
1 30-60 Drink $ 1.25 $ 1.25
2 61-120 Drink + Snack $ 2.50 $ 3.75
3 121- Drink + Heavy Meal $ 5.00 $ 8.75
180
4 181- Drink + Snack + Heavy $ 7.50 $ 16.25
240 Meal
5 241- IDR 300,000.00 $ 25.00 $ 41.25
300
6 > 301 IDR 300,000 + $ 60.00 $ 91.25
Accomodation ($35)

For international flights, European Union Air Passenger Rights is the only available fixtures regulating any
compensation should be given for delayed flights. As Garuda Indonesia is currently flown to Amsterdam, this
option will be used as baseline standard for all its international flights:

• For delay < 3 Hours: $ 50

• For delay > 3 hours: cash compensation as stated in
https://europa.eu/youreurope/citizens/travel/passenger-rights/air/index_en.htm#compensation-delay-
1

Form MZ-3-01.1 (2-11) Page 4 of 7

 ENGINEERING REPORT No. : 10000161209/000/00
Table 6: International Passenger Compensation Cost / Pax

Amount in EUR Flight Distance

250 1500 km or less
More than 1500 km within EU
400 and all other flights between
1500 km and 3500 km
600 More than 3500 km

Before calculating the total passenger compensation cost for the x st hours, please note that the passenger seat
load factor (SLF) will be assumed 75%, based on the data obtained from annual report, summarized in the
following table:

Table 7: Passenger Summary Data for FY 2017

A320-200 B737-800 ATR72-600 CRJ-1000 B777-300 A330

Pax Carried Citilink Garuda Indonesia Domestic Garuda Indonesia International
Based on GA Annual 12274744 19172026 4790904
Flight Hours 118688 209388 26025 37166 42361 72143
ASK 12273204000 23008402000 26743392000
SLF 79.78% 72.72% 73.95%

In final, the passenger compensation cost for regional flights will be:

Table 8: Passenger Compensation Cost for the Xst Hours - Regional Flights

A320-200 B737-800 ATR72-600 CRJ-1000 B777-300 A330

No. of Pax 180 162 70 96 314 251
Delay cat
1 $ 168.75 $ 151.88 $ 65.63 $ 90.00 $ 294.38 $ 235.31
2 $ 506.25 $ 455.63 $ 196.88 $ 270.00 $ 883.13 $ 705.94
3 $ 1,181.25 $ 1,063.13 $ 459.38 $ 630.00 $ 2,060.63 $ 1,647.19
4 $ 2,193.75 $ 1,974.38 $ 853.13 $ 1,170.00 $ 3,826.88 $ 3,059.06
5 $ 5,568.75 $ 5,011.88 $ 2,165.63 $ 2,970.00 $ 9,714.38 $ 7,765.31
6 $ 13,668.75 $ 12,301.88 $ 5,315.63 $ 7,290.00 $ 23,844.38 $ 19,060.31

International flights:

Table 9: Passenger Compensation Cost for the Xst Hours - International Flights

B777-300 A330
No. of Pax 314 251
Delay cat
1 $ 11,775.00 $ 9,412.50
2 $ 11,775.00 $ 9,412.50
3 $ 11,775.00 $ 9,412.50
4 $ 182,748.00 $ 146,082.00
5 $ 182,748.00 $ 146,082.00
6 $ 182,748.00 $ 146,082.00

Aircraft Lease Opportunity Loss

This component cost comes from total aircraft leasing cost as briefed in annual report FY 2017, proportioned and
categorized into several aircraft type:

Form MZ-3-01.1 (2-11) Page 5 of 7

 ENGINEERING REPORT No. : 10000161209/000/00
Table 10: Aircraft Lease Opportunity Loss

A320-200 B737-800 ATR72-600 CRJ-1000 B777-300 A330

Leasing Cost $1,063,517,158.00
Fleet flight hours
ratio to total 0.234667468 0.413997639 0.051456094 0.073483849 0.083755296 0.142639653
operational hours
A/C in Service 48 73 15 18 10 24
Aircraft Leasing Cost
$ 15,704.96 $ 16,929.93 $ 10,756.98 $ 13,017.93 $ 30,647.40 $ 21,812.27
/ Day
Daily Flight-Hours
Utilization (in 448 483 307 372 873 623
minutes)
Opportunity Lost
(based on A/C
$ 2,103.34 $ 2,103.10 $ 2,102.34 $ 2,099.67 $ 2,106.35 $ 2,100.70
leasing cost) / Hours
Delay

Total Delay Cost

After examining all previous delay cost components, the following table will summarize the overall delay cost for
each Xst hours:

Table 11: Overall Technical Delay Cost – Regional Flights

For the Xst Hours

(Included Pax A320-200 B737-800 ATR72-600 CRJ-1000 B777-300 A330
Compensation Cost)
1 $ 6,299.60 $ 6,574.37 $ 4,411.50 $ 4,741.90 $ 14,870.23 $ 12,247.07
2 $ 12,767.96 $ 13,046.38 $ 8,466.10 $ 9,466.66 $ 29,145.95 $ 23,929.45
3 $ 19,573.81 $ 19,822.14 $ 12,651.94 $ 14,371.42 $ 44,010.42 $ 36,082.46
4 $ 26,717.16 $ 26,901.65 $ 16,969.03 $ 19,456.18 $ 59,463.64 $ 48,706.10
5 $ 36,223.01 $ 36,107.41 $ 22,204.88 $ 25,800.94 $ 79,038.11 $ 64,624.11
6 $ 50,453.87 $ 49,565.67 $ 29,278.22 $ 34,665.70 $ 106,855.08 $ 87,130.86

While for the international route:

Table 12: Overall Technical Delay Cost - International Flights

For the Xst Hours

(Included Pax B777-300 A330
Compensation Cost)
1 $ 26,350.86 $ 21,424.26
2 $ 40,037.83 $ 32,636.02
3 $ 53,724.80 $ 43,847.78
4 $ 238,384.76 $ 191,729.03
5 $ 252,071.73 $ 202,940.79
6 $ 265,758.70 $ 214,152.55

C. Technical Cancellation Costs

Technical cancellation costs alone is consists of total operational cost, proportioned by total FC for each aircraft
type. Ticket costs will also be considered. In addition, prior to cancellation, 6 hours technical delay is assumed to
be occurred.

Therefore, the technical cancellation costs will be:

Form MZ-3-01.1 (2-11) Page 6 of 7

 ENGINEERING REPORT No. : 10000161209/000/00
Table 13: Total Cancellation Cost

A320-200 B737-800 ATR72-600 CRJ-1000 B777-300 A330

Total Operational
$ 2,478,025,975.00
Cost
Fleet flight hours
ratio to total 0.234667468 0.413997639 0.051456094 0.073483849 0.083755296 0.142639653
operational hours
Operational cost per
$ 581,512,081.40 $ 1,025,896,903.64 $ 127,509,536.92 $ 182,094,887.58 $ 207,547,799.95 $ 353,464,765.51
fleet
Total FC 86290 141217 28133 30377 5406 18152
CANCELLATION COST
PER EVENT
Assumed with
$ 6,739.04 $ 7,264.68 $ 4,532.38 $ 5,994.50 $ 38,392.12 $ 19,472.50
operational cost per
fleet divide by total
FC

Pax ticket cost $ 8,156.17 $ 8,409.97 $ 3,633.94 $ 4,983.69 $ 59,716.33 $ 47,735.02

Cancel Cat 1 =
$ 14,455.77 $ 14,984.34 $ 8,045.44 $ 9,725.59 $ 74,586.56 $ 59,982.10
Delay Cat 1 + Tix Cost

Assumed that prior

to cancellation, delay
6 hours were
occurred, thus $ 57,192.91 $ 65,240.32 $ 37,444.54 $ 45,643.88 $ 204,963.52 $ 154,338.39

Cancel cost cat 2:

Cost per Event - irreg

IV. CONCLUSION
1. Technical delay and cancellation costs has been composed in reference with respective costs from annual
report FY 2017, and operational summary report from FRR FY 2017.

V. RECOMMENDATION
1. This report should be updated annually based on financial and operational performance annual report of
Garuda Indonesia Group, and Fleet Reliability Report to update the current cost standardization of technical
delay / cancellation.

VI. ACKNOWLEDGEMENT
1. Special acknowledgement for JKTMQEGA for assisting and review this technical delay and cancellation costs up
to MRC-WG discussion.

Form MZ-3-01.1 (2-11) Page 7 of 7