Number 248 - Reporting Of Air Carrier Operating Expenses And Inventories Of Airframes And Aircraft Engines
Number 248
Issue Date: 12/1/00
Effective Date: Immediately
This directive rescinds Accounting and Reporting Directive No. 93, reporting of Air carrier Operating Expenses and Inventories of Airframes and Aircraft Engines, and revises and reissues the reporting guidance contained in Directive No. 93.
BACKGROUND:
On March 13, 1987, the Department of Transportation (DOT) issued a final rule revising Part 241 of its Economic Regulations. This action reduced the level of detailed operating expenses data reported by large certificated air carriers. The reduction was accomplished by replacing the current RSPA Form 41 Schedules P-6 "Maintenance, Passenger Service and General Services and Administration Expenses Functions," P-7 "Aircraft and Traffic Servicing, Promotion and Sales, and General and Administrative Expense Functions Group II and Group III Air Carriers," and P-8 "Aircraft and Traffic Servicing, Promotion and Sales Expense Subfunctions" with revised Form 41 Schedules P-6 "Operating Expenses by Objective Groupings" and P-7 "Operating Expenses by Functional Groupings Group III Air Carriers." The final rule also eliminated Form 41 Schedule B-8 "Flight Equipment Retired" and revised and retitled Form 41 Schedule B-7 "Airframes and Aircraft Engines Acquired" as "Airframe and Aircraft Engine Acquisitions and Retirements" to accommodate the reporting of both acquisitions and retirements on a single schedule. The final rule also revised Form 41 Schedule P-10 "Employment Statistics by Labor Categories" by simplifying the reporting of labor categories by individual functional account.
On April 27, 1987, the DOT Research and Special Programs Administration, Office of Aviation Information Management issued Reporting Directive No. 93 effective July 1, 1987. The directive provided guidance on reporting air carrier operating expenses on Schedules P-6 and P-7 and the inventories of airframes and aircraft engines on Schedules B-7 and B-43 "Inventory of Airframes and Aircraft Engines." Attachments A and B of the directive contained an accounting bridge between the old and new operating expense report schedules to assist carriers in summarizing their data for completing revised Schedules P-6 and P-7. Schedule P-6 is applicable to Group I air carriers with total annual operating revenues of $20 million or more, Group II air carriers, and Group III air carriers. Schedule P-7 is applicable to only Group III air carriers. Attachment C of the directive contained a data format outline that categorized the reporting of airframes and engines on the revised Schedule B-7 and Schedule B-43. Schedule B-7 is applicable to Group II and Group III air carriers, while Schedule B-43 is applicable to all air carrier groups.
CHANGES TO DIRECTIVE NO.93
This directive revises Attachment A to Accounting and Reporting Directive No. 93 by clarifying two of the expense categories in the Schedule P-6 reporting instructions. The clarifications affect the reporting of taxes and the costs of outside repairs of ground property and equipment.
It is not appropriate to report aircraft property taxes on Line 16 "Aircraft Fuel and Oil Expense" as directed by Accounting and Reporting Directive No. 93. The revised reporting instructions for Schedule P-6, as contained in Attachment A to this Directive, splits the reporting of taxes reported in objective account 69 "Taxes Other Than Payroll" between Schedule P-6 Lines 16 and 34 "Other." Nonrefundable fuel taxes should be included in Line 16, whereas aircraft property taxes should be reported in Line 34 with all other taxes not related to payroll or income.
It is also appropriate to report on Line 25 "Outside Flight Equipment Maintenance" the costs for outside repairs of general ground property and equipment that are contained in account 5243.9, "General Services Purchased-Other Services." The costs on Line 25 should pertain to the maintenance of flight equipment, not ground property. The maintenance costs in account 5243.9 that are associated with ground property and equipment should be reported on Schedule P-6 Line 28 "Other Services."
This Directive also corrects a typographical error in Attachment B to Directive No.93, which contains the Schedule P-7 instructions on how to report on Line 20 the reservation and sales expenses "Directly Assignable to Passenger." Directive No. 93 notes that the costs for Line 20 should be the sum of accounts 6526.3, 6539.1 and 6563. Attachment B to this Directive revises the reporting instructions for Schedule P-7 to read the sum of accounts 6526.3, 6539.1 and 5563. Account 6563 was changed to 5563 because objective account 63 "Interrupted Trips Expense" applies only to functional account 5500 "Passenger Service."
For your reference, Attachments A and B to this Directive reissues the corrected reporting instructions for Form 41 Schedules P-6 and P-7, respectively. Attachment C coincides with Attachment C, "Outline of Reporting Airframe and Aircraft Engine Acquisitions, Retirements, and Inventories reported on BTS Form 41 Schedules B-7 and B-43," to Directive No. 93. Lastly, the schedule designations contained in Attachments A, B and C to Directive No. 93 have been changed from RSPA Form 41 Schedules P-6, P-7, B-7 and B-43 to BTS Form 41 Schedules P-6, P-7, B-7 and B-43 in order to reflect the organizational changes at the Department since Directive No. 93 was issued in 1987.
If you have any questions on the revised reporting, please contact Mr. Buzz Rife at (202) 366-6112.
Donald W. Bright
Acting Director
ATTACHMENT A
Operating Expenses By Objective Groupings
Carrier:_________________
Operation:__________
Quarter Ending:__________
| Line 1 | SALARIES AND RELATED FRINGE BENEFITS: | |
| Line 2 | SALARIES: | |
| Line 3 | General management personnel | |
| Line 4 | Flight personnel | |
| Line 5 | Maintenance labor | |
| Line 6 | Aircraft and traffic handling personnel | |
| Line 7 | Other personnel | |
| Line 8 | Total Salaries | |
| Line 9 | RELATED FRINGE BENEFITS: | |
| Line 10 | Personnel Expense | |
| Line 11 | Employee benefits and pensions | |
| Line 12 | Payroll taxes | |
| Line 13 | Total Related Fringe Benefits | |
| Line 14 | Total Salaries and Related Fringe Benefits | |
| Line 15 | MATERIALS PURCHASED: | |
| Line 16 | Aircraft fuel and oil | |
| Line 17 | Maintenance material | |
| Line 18 | Passenger food | |
| Line 19 | Other materials | |
| Line 20 | Total Materials | |
| Line 21 | SERVICES PURCHASED | |
| Line 22 | Advertising and other promotion | |
| Line 23 | Communication | |
| Line 24 | Insurance | |
| Line 25 | Outside flight equipment maintenance | |
| Line 26 | Traffic commissions Passenger | |
| Line 27 | Traffic commissions Cargo | |
| Line 28 | Other services | |
| Line 29 | Total Services | |
| Line 30 | LANDING FEES | |
| Line 31 | RENTALS | |
| Line 32 | DEPRECIATION | |
| Line 33 | AMORTIZATION | |
| Line 34 | OTHER | |
| Line 35 | TRANSPORT RELATED EXPENSE | |
| Line 36 | TOTAL OPERATING EXPENSES |
INSTRUCTIONS FOR SCHEDULE P-6
| Line 1 | Salaries and related fringe benefits shall be reported in the following categories: |
| Line 2 | Salaries shall be subdivided as follows: |
| Line 3 | General Management Personnel = Sum of objective Account 21 for all functions |
| Line 4 | Flight Personnel = Sum of objective Accounts 23 and 24 for all functions |
| Line 5 | Maintenance Labor = Sum of objective Accounts 25.1 + 25.2 + 25.3 + 25.6 + 25.9 + 28.2 for all functions + proration for Line 5 (See footnote 2) |
| Line 6 | Aircraft and Traffic Handling Personnel = Sum of objective Accounts 26 + 26.1 + 26.2 + 26.3 + 26.4 for all functions |
| Line 7 | Other Personnel = Sum of objective Accounts 28.1 + 30 + 31 + 32 + 33 + 34 + 35 for all functions |
| Line 8 | Total Salaries = Sum of Line 3 + 4 + 5 + 6 + 7 |
| Line 9 | Related fringe benefits shall be subdivided as follows: |
| Line 10 | Personnel Expense = Sum of objective Account 36 for all functions |
| Line 11 | Employee Benefits and Pensions = Sum of objective Account 57 for all functions |
| Line 12 | Payroll Taxes = Sum of objective Account 68 for all functions |
| Line 13 | Total Related Fringe Benefits = Sum of Lines 10 + 11 + 12 |
| Line 14 | Total Salaries and Related Fringe Benefits = Sum of Lines 8 + 13 |
| Line 15 | Materials purchased shall be reported in the following categories: |
| Line 16 | Aircraft Fuel and Oil = Sum of objective Accounts 45 + 45.1 + 45.2 for all functions + objective Account 69 for 5100 function only (less aircraft property taxes in Account 5169) |
| Line 17 | Maintenance Material = Sum of objective Accounts 46.1 + 46.2 + 46.3 + 46.6 + 46.9 + 49 + 54 for all functions + proration for Line 17 (See footnote 2/) |
| Line 18 | Passenger Food = Sum of objective Account 51 for all functions |
| Line 19 | Other Materials = Sum of objective Accounts 38 + 50 + 53 for all functions |
| Line 20 | Total materials = Sum of Lines 16 + 17 + 18 + 19 |
| Line 21 | Services purchased shall he reported in the following categories: |
| Line 22 | Advertising and Other Promotion = Sum of objective Accounts 59 + 60 + 62 for all functions |
| Line 23 | Communications = Sum of objective Account 37 for all functions |
| Line 24 | Insurance = Sum of objective Accounts 55 + 56 for all functions |
| Line 25 | Outside Flight Equipment Maintenance = Sum of objective Accounts 43.1 + 43.2 + 43.3 + 43.6 + 43.7 + 43.8 + 43.9 for 5200 function only + proration for Line 25 (See footnote 2_/) (less maintenance costs in Account 5243.9 for ground property and equipment) |
| Line 26 | Traffic Commissions - Passenger = Sum of objective Accounts 39 (See footnote 1/) + 39.1 for all functions |
| Line 27 | Traffic Commissions - Cargo = Sum of objective Accounts 39 (See footnote 1/) + 39.2 for all functions |
| Line 28 | Other Services = Sum of objective Accounts 40 + 41 for all functions + objective Accounts 43.7 + 43.8 + 43.9 for all functions except 5200 (plus maintenance costs in Account 5243.9 for ground property and equipment) |
| Line 29 | Total Services = Sum of Lines 22 + 23 + 24 + 25 + 26 + 27 + 28 |
| Line 30 | Landing Fees = Sum of objective Account 44 for all functions |
| Line 31 | Rentals = Sum of objective Account 47 for all functions |
| Line 32 | Depreciation = Sum of objective Accounts 73.1 + 73.2 + 75.1 + 75.2 + 75.3 + 75.4 + 75.5 + 75.8 + 75.9 for 7000 function |
| Line 33 | Amortization = Sum of objective Accounts 74.1 + 74.2 + 76 for 7000 function |
| Line 34 | Other = Sum of objective Accounts 58 + 61 + 63 + 64 + 65 + 66 + 67 + 71 + 77.8 + 77.9 for all functions + 69 for all functions except 5100 (plus aircraft property taxes in Account 5169) |
| Line 35 | Transport-Related Expenses = Total of 7100 function |
| Line 36 | Total Operating Expenses = Sum of Lines 14 + 20 + 29 + 30 + 31 + 32 + 33 + 34 + 35 |
FOOTNOTES
1 Under this Schedule P-6, Group I carriers are required to report a separate amount for Traffic Commissions - Passenger (6939.1) and Traffic Commissions - Cargo (6939.2). Previously, this group reported only Total Traffic Commissions (6939).
2 For all groups, proration for Lines 5 and 17 and 25.
Step 1: Net of accounts
5272.1 5372.1
5272.2 5372.2
5272.3 5372.3
5272.4 5372.4
5272.6 5372.6
5272.7 5372.7
5272.8 5372.8
5272.9 5372.9
Net________________________________________________________________
Step 2: Sum of Lines 5 + 17 + 25 before proration of amount in Step 1.
For proration applicable to Line 5
Step 3: Line 5 before proration / Sum of Lines 5 + 17 + 25 before proration
Step 4: Proration = Net (Step 1) X Ratio (Step 3)
For proration applicable to Line 17
Step 3A: Line 17 before proration / Sum of Lines 5 + 17 + 25 before proration
Step 4A: Proration = Net (Step 1) X Ratio (Step 3A)
For proration applicable to Line 25
Step 3B: Line 25 before proration / Sum of Lines 5 + 17 + 25 before proration
Step 4B: ProrationNet (Step 1) X Ratio (Step 3B)
ATTACHMENT B
Operating Expenses By Functional Groupings
Group Iii Air Carriers
Carrier:________________
Operation: __________
Quarter Ending:__________
| Line 1 | AIRCRAFT OPERATING EXPENSES (DIRECT OPERATING COSTS): | |
| Line 2 | Total* | |
| Line 3 | SERVICING, SALES, AND GENERAL OPERATING EXPENSES (INDIRECT COSTS): | |
| Line 4 | PASSENGER SERVICE EXPENSE: | |
| Line 5 | Flight attendants expense: | |
| Line 6 | Food expense: | |
| Line 7 | Other in-flight expense: | |
| Line 8 | Total Passenger Service Expense: | |
| Line 9 | AIRCRAFT SERVICING EXPENSE: | |
| Line 10 | Line servicing expense: | |
| Line 11 | Control expense | |
| Line 12 | Landing fees | |
| Line 13 | Total Aircraft Servicing Expense | |
| Line 14 | TRAFFIC SERVICING EXPENSE: | |
| Line 15 | Directly assignable to passenger | |
| Line 16 | Directly assignable to baggage and cargo | |
| Line 17 | Not directly assignable | |
| Line 18 | Total Traffic Servicing Expense | |
| Line 19 | RESERVATION AND SALES EXPENSES | |
| Line 20 | Directly assignable to passenger | |
| Line 21 | Directly assignable to cargo | |
| Line 22 | Not directly assignable | |
| Line23 | Total Reservation and Sales Expense | |
| Line24 | ADVERTISING AND PUBLICITY EXPENSE: | |
| Line25 | Directly assignable to passenger | |
| Line26 | Directly assignable to cargo | |
| Line27 | Institutional advertising expense | |
| Line28 | Total Advertising and Publicity Expense | |
| Line29 | GENERAL AND ADMINISTRATIVE EXPENSE | |
| Line30 | MAINTENANCE AND DEPRECIATION--GROUND PROPERTY AND EQUIPMENT: | |
| Line31 | Maintenance | |
| Line32 | Depreciation | |
| Line 33 | Total Maintenance and Depreciation-Ground Property and Equipment | |
| Line 34 | DEPRECIATION EXPENSE--MAINTENANCE EQUIPMENT | |
| Line 35 | AMORTIZATION (OTHER THAN FLIGHT EQUIPMENT) | |
| Line 36 | TOTAL SERVICING, SALES, AND GENERAL OPERATING EXPENSES | |
| Line 37 | TRANSPORT RELATED EXPENSES | |
| Line 38 | TOTAL OPERATING EXPENSES |
*Detail by aircraft type on Schedule P-5.
(GROUP III CARRIERS ONLY)
| Line 1 | Aircraft operating expenses (direct operating costs) shall be reported as follows: |
| Line 2 | Total = Account 7098,9 for totals all aircraft types from Schedule P-5.2 |
| Line 3 | Servicing, sales and general operating expenses (indirect operating costs) shall be reported in the following categories: |
| Line 4 | Passenger service expense shall be subdivided as follows: |
| Line 5 | Flight Attendant Expense = Sum of Accounts 5521 + 5524 + 5528.1 + 5530 + 5531 + 5535 + 5536 + 5557 + 5568 |
| Line 6 | Food Expense = Account 5551 |
| Line 7 | Other In-flight Expense = Account 5599 - (Line 5 + Line 6) |
| Line 8 | Total Passenger Service Expense = Sum of Lines 5 + 6 + 7 |
| Line 9 | Aircraft servicing expense shall be subdivided as follows: |
| Line 10 | LineServicing Expense = Account 6126.1 |
| PLUS an allocation of the balance in the aircraft servicing expense function (Account 6100) after the following accounts have been excluded: Accounts 6126.1, 6126.2, 6130, 6137 and 6144. This allocation to Line 10 is based on the ratio of Account 6126.1 to the total of Accounts 6126.1 + 6126.2 + 6130. | |
| PLUS an allocation of the servicing administration expense function (Account 6300), based on the ratio of total salary expenses included in Line 10 (both directly assigned and allocated as above) to total salary expenses in both the aircraft servicing expense function (Account 6100) and the traffic servicing expense function (Account 6200). | |
| Line 11 | Control Expense = Accounts 6126.2 + 6130 + 6137 |
| PLUS an allocation of the balance in the aircraft servicing expense function (Account 6l00) after the following accounts have been excluded: Accounts 6126.1, 6126.2, 6130, 6137 and 6144. This allocation to Line 11 is based on the ratio of the total of Accounts 6126.2 + 6130 to the total of Accounts 6126.1 + 6126.2 + 6130. | |
| PLUS an allocation of the servicing administration expense function (Account 6300), based on the ratio of total salary expenses included in Line 11 (both directly assigned and allocated as above) to total salary expenses in both the aircraft servicing expense function (Account 6100) and the traffic servicing function (Account 6200). | |
| Line 12 | Landing Fees = Account 6144 |
| Line 13 | Total Aircraft Servicing Expense = Sum of Lines 10 + 11 + 12 |
| Line 14 | Traffic servicing expense shall be subdivided as follows: |
| Line 15 | Directly Assignable to Passenger = Account 6226.3 |
| PLUS all other expenses in the traffic servicing expense function (Account 6200) that can be directly assigned or is directly attributable to passenger service based on the carriers own detailed system of accounts. | |
| PLUS allocation of the servicing administration expense function (Account 6300), based on the ratio of total salary expenses included in Line 15 (before allocation) to total salary expenses in both the aircraft servicing expense function (Account 6100) and the traffic servicing expense function (Account 6200). | |
| Line 16 | Directly Assignable to Baggage and Cargo = Accounts 6226.4 + 6256 |
| PLUS all other expenses in the traffic servicing expense function (Account 6200) that can be directly assigned or is directly attributable to baggage and/or cargo service based on the carrier's own detailed system of accounts. | |
| PLUS an allocation of the servicing administration expense function (Account 6300). based on the ratio of total salary expenses included in Line 16 (before allocation) to total salary expenses in both the aircraft servicing expense function (Account 6100) and the traffic servicing expense function (Account 6200). | |
| Line 17 | Not Directly Assignable = The total of the traffic servicing expense function (Account 6200) less all 6200 related amounts in Lines 15 and 16. |
| PLUS an allocation of the servicing administration expense function (Account 6300), based on the ratio of total salary expenses included in Line 17 (before allocation) to total salary expenses in both the aircraft servicing expense function (Account 6100) and the traffic servicing expense function (Account 6200). | |
| Line 18 | Total Traffic Servicing Expense = Sum of Lines 15 + 16 + 17 |
| Line 19 | Reservation and sales expense shall be subdivided as follows: |
| Line 20 | Directly Assignable to Passenger = Accounts 6526.3 + 6539.1 + 5563 |
| PLUS all other expenses in the reservations and sales expense function (Account 6500) that can be directly assigned or is directly attributable to passenger service based on the carrier's own detailed system of accounts. | |
| Line 21 | Directly Assignable to Cargo = Accounts 6526.4 + 6539.2 |
| PLUS all other expenses in the reservations and sales expense function (Account 6500) that can be directly assigned or is directly attributable to cargo service based on the carrier's own detailed system of accounts. | |
| Line 22 | Not Directly Assignable = The total of the reservations and sales expense function (Account 6500) less Lines 20 + 21. |
| Line 23 | Total Reservation and Sales Expense = Sum of Lines 20 + 21 + 22 |
| Line 24 | Advertising and publicity expense shall be subdivided as follows: |
| Line 25 | Directly Assignable to Passenger = All expenses in the advertising and publicity expense, function (Account 6600) that can be directly assigned or is directly attributable to passenger service based on the carrier's own detailed system of accounts. |
| Line 26 | Directly Assignable to Cargo = All expenses in the advertising and publicity expense function (Account 6600) that can be directly assigned or is directly attributable to cargo service based on the carrier's own detailed system of accounts. |
| Line 27 | Institutional Advertising Expense The total of the advertising and publicity expense function (Account 6600) less Lines 25 + 26. |
| Line 28 | Total Advertising and Publicity Expense = Sum of Lines 25 + 26 + 27 |
| Line 29 | General and Administrative Expense = Total of 6800 function |
| Line 30 | Maintenance and depreciation--ground property and equipment shall be subdivided as follows: |
| Line 31 | Maintenance - The total of the maintenance expense function (Account 5400) less Account 5299 for totals all aircraft types from Schedule P-5.2. |
| Line 32 | Depreciation = Account 7075.9 |
| Line 33 | Total Maintenance and Depreciation--Ground Property and Equipment = Sum of Lines 31 + 32 |
| Line 34 | Depreciation Expense--Maintenance Equipment = Account 7075.8 |
| Line 35 | Amortization (other than flight equipment) = Accounts 7074.1 + 7074.2 + 7076 (less Account 7076 for total all aircraft types from Schedules P-5.2). |
| Line 36 | Total Servicing, Sales and General Operating Expenses = Sum of Lines 8 + 13 + 18 + 23 + 28 + 29 + 33 + 34 + 35 |
| Line 37 | Transport Related Expenses = Total of 7100 function |
| Line 38 | Total Operating Expenses = Sum of Lines 2 + 36 + 37 |
OUTLINE OF REPORTING AIRFRAME AND AIRCRAFT ENGINE ACQUISITIONS RETIRREMENTS, AND INVENTORIES ON BTS FORM 4L SCHEDULES B-7 AND B-43
Schedule B-7 Airframe And Aircraft Engine Acquisitions And Retirements
A. Acquisitions
1. Owned
a. Airframe
b. Aircraft Engines
2. Capital Lease (More than 90-day period)
a. Airframes
b. Aircraft Engines
3. Operating Lease (More than 90-day period)
a. Airframes
b. Aircraft Engines
4. Airframe Units Returned to Air Carrier After More Than 90-day Lease
B. Retirements - Includes Operating and Nonoperating Property and Equipment
1. Owned
a. Airframe
b. Aircraft Engines
2. Capital Lease
a. Airframe
-Returned to Lessor
- Leased to Others for More Then 90-day Period
b. Aircraft Engines
- Returned to Lessor
- Leaned to Others for More Then 90-day Period
3. Sales-Type and Direct Financing Lease
a. Airframe
b. Aircraft Engines
4. Operating Lease
a. Airframes
- Returned to Lessor
- Leased to Others for More Then 90-day Period
b. Aircraft Engines
- Returned to Lessor
- Leased to Others for More Than 90-day Period
Schedule B-43 Inventory Of Airframes And Aircraft Engines
A. Owned - Operating Equipment
1. Airframes
2. Aircraft Engines
B. Owned - Nonoperating Equipment
1. Airframes
2. Aircraft Engines
C. Capital Lease - Operating Equipment
1. Airframes
2. Aircraft Engines
D. Capital Lease - Nonoperating Equipment
1. Airframes
2. Aircraft Engines
E. Operating Lease - Operating Equipment
1. Airframes
2. Aircraft Engines
F. Operating Lease - Nonoperating Equipment
1. Airframes
2. Aircraft Engines