ABSTRACT
This chapter begins with a section on cost (expenditure) control principles, but much of what follows is necessarily concerned more with methods for measuring, analyzing, and reporting project costs. In fact most so-called cost management methods actually add costs themselves, without adding value to the project. Many things can happen during the life of a project to distort the expected rate and magnitude of expenditure or to delay expected revenues. Whereas this is true for any project in any industry, it is especially true in the aviation industry where profit margins tend to be traditionally low and the ability to control costs, especially in non-value added activities, can make the difference between an organization's profit and loss. Materials, bought services and expenses usually constitute more than half the costs of a project, and controlling these costs is thus particularly important. Management must always strive to keep the fixed costs as low as possible in relation to the variable costs.
