An assessment of economic costs of cargo transporting airlines by the use of a structural cost function

This paper validates a disaggregated theoretical cost function for cargo services for one step of cost emergence, namely the flight level. Data was provided by the US Department of Transportation and a multinomial linear regression has been developed. Results allow comprehensive insights into the industry such as the major cost components of cargo airlines, their composition as well as discussions on the existence of economies of scale and density for cargo airlines.