Our first speaker this morning is a friend of mine, Danny McAdams, I worked with him and have known him for many, many years. He worked for Congressman Ron Paul in Washington, D.C. and was his foreign policy spokesman. He now runs the Ron Paul Institute out of Lake Jackson, Texas, which is also where Ron and Carol reside, so he works with Ron on a daily basis producing the Ron Paul Liberty Report, among other things, which all of you should follow on YouTube. It's really a great 15, 20, 30 minutes of your day and you can catch up with them on the weekend. I can't recommend it highly enough. They don't only cover foreign policy, but they primarily do. So you can see Ron's thoughts and Daniel's thoughts on a daily basis. So please give a big round of applause to Mr. Danny McAdams. Well, I was talking to Dr. Paul the other day and I said, and I don't know how to put this together. What should I, how should I put together a talk? He said, just do a Liberty Report.  But I'd like to start with a couple of thank yous. First of all, I'd like to thank all of you for coming out on a Saturday to visit with us, to listen to what we have to say. This makes it possible, all of you make it possible. Your continued enthusiasm and the fantastic work that the Mises Institute does and some of the work that we do. So thank you to all of you. I'd also like to thank the Mises Institute and Jeff Deist in particular for inviting me to join you. The Mises Institute is an absolute inspiration for all of us and we're happy that they're very healthy. I'd also like to thank Klaus and Anastasia Thalsma who helped put this together. They've been wonderful supporters of the Ron Paul Institute as well and we're so grateful for their friendship, ongoing friendship. I'd also like to recognize a good friend of mine, Dr. Robert Paul, another Dr. Paul who's here just looking out for us. I'm so glad he could join us. He's in Fort Worth. So one of the things that I usually do when I give a talk is I like to read the headlines from antiwar.com and if you've seen me talk, it may sound a little silly but one of the things we do with the Liberty Report is that we look, we are on a tight news cycle. We look at what's happening that morning. Dr. Paul will send me an email at 6.30. Hey, what do you think about these things? What do you think about these things? And what we try to do in the show is to go beyond what you'd expect depending on your normal flavor, CNN versus Fox or whatever to try to look at a different way of looking at the news, a different way of looking at foreign affairs, of breaking international affairs to put our view on it, the pro-liberty view, the pro-freedom, the pro-peace view on it. So that's what we do. So for us every day is a news cycle and so I'm gonna quickly go through these just to sort of center us and where we are in the world right now. Trump, June 12th summit with Kim is back on. Kim, North Korea's commitment to denuclearization unchanged. Two Koreas make progress, agree to talks on military reunions. Israelis shoot, kill young female medic. US vetoes UN resolution on protecting Palestinians. Department of Justice, this is a great one. I just put this up on our website. Department of Justice told Trump, Syria attacks were legal, no problem. Here's the rationale, because they couldn't, there's no chance of them fighting back, so therefore it wasn't really a war, so no problem. That's what the Justice Department said. Isn't that great? Russia deal reached to remove Iranian forces from Golan, Taliban categorically reject claim of dialogue with Kabul. US wants to deploy missile, anti-missile system in Germany. So this is the snapshot of where we are today. And so here is the plan for me. I'm gonna give a general talk on war cronyism, as Jeff suggested, but after I get sort of a general overview of what it looks like from my perspective, I wanna drill down deep into three specific components of I think a very dark conspiracy to silence any alternative views, any anti-war views, to silence independent news. It really is, it's not a conspiracy theory, it's a conspiracy fact. So that's part two. So the collusion to perpetuate the institutionalization of our foreign policy, the war cronyism that we have is made up of several components. And these are not anything that you haven't already thought about, but you have the defense contractors, they make billions of dollars, gazillions of dollars, let's put it that way, on things that generally don't work. The F-35, we know all about it, made in all 50 states in five foreign countries, you can't kill it, they make tons of money selling fear, selling enemies. And what do they do with some of that money, they plow it into think tanks. Increasingly you see the Institute for the Study of War, it's one of the Kagan family, the neocon princes and princesses. The Institute for the Study of War, you just click on who supports them and it's Lockheed Martin, Raytheon, go down the list. And what do they do, and I'm not singling them out because you can go to CSIS, you could go to virtually every think tank, Brookings, left, right center, it doesn't matter, look at who supports them and actually increasingly they're getting rid of those that information, but look at who funds them, it is always the defense contractors, first and foremost. So what do they do, they produce very frightening sounding policy papers about threats overseas, this could happen, oh my God, the Iranians are gonna do this, oh the Russians are gonna do this.  And so what do they do, well then here's where Congress comes in, it needs some experts on a committee hearing and we've had dozens and dozens of committee hearings when I was working for Dr. Paul. And what do they do, they bring experts in from the think tanks, these are the great guys, the great experts, but they all have the same view, there's never a pro-war guy and an anti-war guy, there's never a neocon and an anti-neocon or a pro-freedom person, it's always the same and they always agree and they're always funded by the people who are going to make a huge profit if the surge takes place, you know, Fred Kagan who's the husband of Kimberly Kagan who runs the Institute for the Study of War, he was virtually, every time there was a hearing on the surge, here he was sitting right up front giving his expert opinion of how it's gonna win the war finally for us in Iraq, well, guess what? We're still there, thanks a lot. And then you have the media, of course. The media features the experts, the think tank experts, the people who's living, whose sinecures are paid for by the military industrial complex. If Fox News wants to have an expert, well, they'll call it, they'll call it general, they'll call it think tanker, they never have someone like us, they never have an expert who's not for the war, for the intervention, so the media is part of the collusion. Congress, I mentioned already, Congress is the one who looks to think tanks, but also remember when Congress members resign or lose an election, which is rare, or when they decide that they need to spend more time with their family, which is more common, they will look for, they will look for lucrative jobs in lobbying and they will become part of this system, part of the system they will work for, one of the defense contractors. And as a little aside, you know, Dr. Paul was known for his gentile and friendly attitude. I only saw him get angry once. And that was when he extended a congressional courtesy to a former chairman of the House International Relations Committee who wanted to come in and talk about a certain defense, I forget what, some defense gadget. And as a professional courtesy, Dr. Paul said, okay, I'll see you. So he came in and sat down, well, Ron, we gotta do this, we gotta buy this, we gotta do this, and I can see his face that something was happening, and it's the only time I've ever seen him kick someone out of his office, but it was, so this is what they do and they make a lot of money doing it. So this is how the system works, more money from the defense, from the military industry, into the think tanks, into the media, and round and round and round we go, that's why we can't break the cycle of endless new wars. Look at our national security strategy for the United States that was just released earlier this year. They basically said, this whole war on terrorism thing, it was great while it lasted, but now we've got a new enemy. It's Russia and China, we gotta go back to this one. So forget all this stuff, forget all this money we've spent, we've gotta find someone else, and this is how it works. So that's the system in a nutshell. But now I wanna drill down as much as I can in the time that I have, because I think this media hole, the hold of the media, this whole sort of circle is fracturing a little bit. I sense weakness, and a lot of that weakness comes from the independent media. It comes from bloggers, it comes from social media, it comes from experts who are not featured on Fox News and MSNBC, et cetera, but nevertheless learn a lot about these things. And they're challenging the narrative, and that's become dangerous for the mainstream. And how do they challenge it? Well, let's look for an example. Look at the recent chemical attack in Douma in Syria. Well, it was very, very shortly after the US claimed, or 100% sure that Assad did it, that you had some independent voices that were doing research and debunking it, debunking it right away. And in fact, you had a young fellow from a conservative network who went over there to the place where the attack supposedly took place. And he interviewed all the people that were there. They said, we had no idea. There was no attack. So this independent alternative media is debunking things as fast as they're coming around. The Scripple case is another example. I don't need to go into it, because here it's just a miraculous resurrection of the Scripples. They had the most deadly substance known in the universe.  Yet somehow they survived. They went and had a long boozy lunch and et cetera, et cetera. Then they passed out on a bench. Now they're fine. In fact, she looks better than ever. So, but this was been debunked. There was a little blog called the Blogmire, and we featured some of their things on our website. This is an independent guy who lives in Salisbury, a very intelligent guy, and he simply debunked the logic of it. So this is a danger. And because of this danger, I think the danger to the narrative, there's a concerted effort by governments, media, defense contractors to push back against this independent media. So that is the real danger. What you have to do is you have to set up a kind of scenario where if you disagree with the pro-interventionist mindset, if you disagree that we need to have more wars, if you disagree that, no, actually, we're always been at war with East Asia. You know, we're always been at war with Russia.   So this is how you silence, and this is what they're doing. So I wanna look at three examples of this. And the first, you probably remember, I think this is sort of how it dawned, and this came from the ferment of the surprise Trump election. It left the mainstream narrative in crisis, I think, because of the things that Donald Trump, as a candidate was saying, were very threatening to the status quo, to the deep state, if you wanna call it that. They were threatening, and I think you all follow this, I don't need to tell you everything that's happened, but I think they're in a panic. And so let's just dial back to November 24th, 2016. The election had just happened. There was a front page story on the Washington Post, front page, the paper of record of Washington. And it was an article called, here was the title, Russian propaganda effort helped spread fake news during election, comma, experts say. You probably remember the piece. It was fascinating because it used this organization that is completely anonymous. We have no idea, we know now who they are, we have a very good idea. Completely anonymous, we have no idea what their methodology is, how they came to these conclusions, prop or not. They were going to purport to tell us whether a website is propaganda or not, or whether it's in the service of a foreign government or not. So they listed 200 websites that are, quote, routine peddlers of Russian propaganda during the election season. And that sounds pretty bad. 200 websites that were regularly broadcasting Russian propaganda. But then you look at the sites, the dredge report. Zero hedge, a lot of us are interested in financial information. We look at zero hedge all the time. Lou Rockwell, the Ron Paul Institute, consortium news. All of these alternative sites that were challenging these narratives are all of a sudden linked on the front page of the Washington Post as agents of a foreign power, not just bad guys with bad ideas or old isolationists, whatever, really bad guys. And this is some of the things I'd like to read a couple of quotes from it because it really is worth going back and looking at this. Here's what Timberg said. He's their tech editor who wrote the piece. Some players in this online echo chamber were knowingly part of the propaganda campaign, while others were useful idiots. So there's no other option.  Our view was not legitimate. Our view that we need to get along better with Russia. We need to stop having wars in the Middle East. It wasn't legitimate.  This is the, so here's what the criteria was to determine that we were all secretly Russian agents. We used buzzy quote, buzzy content to attract readers. Okay, that's called we need to get people to read our stuff. You have a headline that attracts attention. And the other one was their work tracks with popular conspiracy theories about how secret forces dictate world events. Okay, we know what that means, the deep state. And this is my old friend from Capitol Hill, Mike Lofken is the first proponent of this idea of a permanent state. And he knew about it because he lived it. He was, he worked on the Senate side. He worked on the House side. He lived it and I lived it. I knew the people that were there forever that wrote the legislation no matter who was elected. So anyway, if you suggest there was a deep state, well then, there you go. So Michael McFall, former US ambassador to Russia, he chimed in in the article. He said, Russian propagandists, they don't try to win the argument. It's just to make everything seem so relative. It's kind of an appeal to cynicism. So that's essentially if you challenge the perspective, you're just appealing to cynicism.  And so I think this was the marker that was laid down. And it was, in fact, they had to have, they had to issue two retractions since the article came out. And I think there are threats of lawsuits and I think they should be sued. Because think about the damage it does to your organization, which is your business, which is your livelihood, which is what you do. If all of a sudden, the Rumpall Institute is not just a site for people to read information with a different perspective, a pro-peace perspective, a pro-pospirity perspective. No, no, you're actually doing the bidding of a foreign power. Who is going to give you a donation? Is the FBI going to come knock at your door? Hey, we heard that you were giving money to this foreign power. It's a dangerous thing that they've done. So that's proper not. And so then what we found out later is that they have had ties, this anonymous proper not, they have ties to another group, a very nefarious group called the Atlantic Council. You may have heard of it. It's a pseudo think tank. It's a hybrid media outlet. It's funded by Western governments. And I'll give you a little bit of info because it's always good to have the stats. Here's from their own website, Atlantic Council on a role of contributors, a million and above, United Arab Emirates, 250 to a million, foreign and Commonwealth Office of the UK, NATO, Ministry of Foreign Affairs, Japan, Raytheon, Lockheed Martin, Chevron, Ukrainian World Congress, US Department of State. Then you have a little lower down, Ministry of Defense of Latvia, Ministry of Foreign Affairs, Montenegro, Cyprus, on and on Lithuania, United States Air Force, United States Army, United States Marine Corps, Navy, and on and on you go. This is where the money comes from. And what do they do with this money, with this tons of money? Well, they do a couple of things. They call for places like RT to be listed as foreign agents, because they're paid by foreign governments. It's interesting because this is an organization that itself, the bulk of its budget is coming from foreign budgets, from foreign governments, are urging that RT is listed for that. So here's a couple of things that they've done. They did an article recently in May. We need NATO to fight the information war. They were worried, this is an article they put out. They said they're worried that if Russia invades the UK, people are not gonna be enthusiastic because they're reading too much Russian propaganda. So they just sort of lay back and let it happen. This is one of their arguments. RT should be forced to register, hold all social media accountable. Here's a great piece they did. How to hold Facebook and Google responsible for fake news, written by a fellow called Jaco Bionda. I think he's a Slovak. He found a much better gig because he used to be a homosexual pornography actor. So he's now in NATO's payroll. But here's what he wrote. Online platforms have become the world's most important editors in chief. 51% of people access news through online social media, allowing these platforms to curate their news intake through personalized algorithms. So this is a bad thing to him. For us, it's a great thing. We personalize our news. We personalize what we get to read and what we get to watch. And he says, these platforms have simultaneously gained economic leverage. Google and Facebook controlled three quarters of the advertising budget responsible for 90% of the growth. Traditional media companies are struggling to define a new business model amid lower advertising revenues and decline in readership. Well, I wonder why, right? This has negative consequences for the quality and independence of media. Here we're getting to the point and can accelerate the spread of inaccurate, low quality news, disinformation, and hate speech. Given the challenge to shore up quality journalism, Western governments must now create a regulatory framework that forces online platforms to take a greater responsibility for their content. There you have it. People are not listening to our garbage anymore. They're reading other stuff. They're going to means. To other places, we've got to do something about this. You think, okay, this is just the ravings. This is just crazy. This is just some weird guy. But what happened? Facebook hired the Atlantic Council to monitor all of the postings on Facebook to ensure that all of the election postings are okay. They hired the Atlantic Council to do this. So, oh, to improve election security. That was the quote. To improve election security, they hire the Atlantic Council to monitor things. And so what does that mean? That means that the Atlantic Council in charge of this wants to get rid of alternative views, paid by NATO, doesn't like anti-war views. Here's an interesting little tidbit that happened for the first time in five years. We take out little micro ads when we put up articles, sometimes on Facebook, for the Ron Paul Institute. Because although we have like 250,000 people who follow us, Facebook's genius algorithms only give it to this many people. It used to be this many, now it shrinks and shrinks. In fact, our traffic is down about 80% from what it was. So to try to make up for that, you can do a little micro mini advertising for articles to try to boost a little bit, you know, to try to get the machine to boost it a little bit. So for the first time in five years last week, I got to notice your ad was not approved. It's a political ad. It was something about Memorial Day, you know, remembering the cause, the wars, how bad they are, something just like this. No, this is a political ad. It relates to political campaigns and political issues. You now have to submit two pieces of photo ID, your social security number, and a street address in order for you to pay us to put an ad up on our site. So if you don't think this is related to the Atlantic Council coming in and saying, don't worry guys, we're gonna sort out this fake news problem once and for all. You know, then you've got another thing coming. But I'm going to skip the German Marshall Fund, although just for a second, they do the same thing. You may have heard of the Hamilton 68 dashboard. This purports to follow 600 Twitter accounts looking for Russian bots, looking for fake news. And they have become the go-to source for Congress. Senator Lankford cited this Hamilton 68, as a source of information that the Russians were trying to get us to lose faith in our institutions because at the time of the NFL season last year, the two trending hashtags were take a knee and boycott the NFL, two completely opposing views. So it had to be the Russians getting us to lose faith in our institutions, to become demoralized and to lose our unity. You know, and it's, and I'm thinking, is this a bad thing? You know, losing faith, what institutions are we talking about? The institutions that lie us into war continuously? I mean, I lost faith in institutions when I saw how Ron Paul was ripped off in 2012 from his delegates. I mean, you don't need to have the Russians to help us lose faith in these institutions. So who's behind Hamilton 68? Group called the Alliance for Securing Democracy. It sounds great. These are the watchdogs there. They don't tell us how they do it because that's secret. But they're gonna protect democracy. Well, who's behind this? Who are these wonderful people that are gonna save our democracy? Well, I hate to break the news. It's Michael Chertov, you remember him. He made a big fortune selling junky scanners and turning the Department of Homeland Security into a Gestapo. Michael Chertov is involved with it, Bill Kristol. Oh, he's a great friend of democracy. Michael McFall, the ambassador to Russia is with them. Who else, what's his name now? The former CIA deputy director, Michael Morrell, openly for Clinton. He sort of broke tradition with the CIA by openly endorsing Hillary Clinton as a candidate and saying that Donald Trump is an agent of Putin. He said that. So these are the guys who are going to go through all of our social media, all the things that we produce and decide whether it's fake news or not. So this is a full frontal attack, I think, on what we are trying to do. And frankly, I am frightened. I look at our numbers, I look what they're doing to us, I look at other organizations and what's happening to them. This is a very nefarious thing. And where did they get the money for this? Well, Congress appropriated $100 million recently to fight Russian propaganda. And as Dr. Paul says, if you subsidize something, you're gonna get a lot more of it. And so what's going to happen? All of this appropriated $100 million that goes to these places like the Atlantic Council, Hamilton 68, prop or not. This money, it changes the purpose. It changes the legitimate opposition to warfare state, to militarism, to military welfareism, to the global military empire, the opposition to that, which is normal, we think. It's a normal, it's patriotic Americanism. It turns that into something nefarious, Russian propaganda. It's very dangerous. It doesn't matter what you think about Russia. That's not the point. What you think about Putin is not the point. What's happening is not about Russia. It's about silencing us. And it's happening right before our eyes. And I think the news is tightening around us. Thank you.


these products into our product suites. But it goes even further than that. It is a major criteria that we use in determining our acquisition targets. If there's a really gangbusters capability out there in a marketplace that was built solely independently without any consideration of how it's going to interact with other products, that is a less desirable acquisition target for us, because this is going to cost us more to make it work in our product suite and to make it work with the way our customers want it to work. So open standards are good for customers. Open standards are good for business unless the business is threatened by open. And I guess that's about what I have to say about why would, as Vice President Crowe said, some people say, well, you can't talk about open. You can't use the word open. We aren't sure what it is. Well, that's true. When you get to the far extreme, what is open from a standard-setting point of view? Is the formal standards process open where you have to be a member of a national body or a national committee to get to the table? And in general, you have to purchase the documents. Is that open? Well, I mean, that's the way the systems evolve over the years, but is that open? Well, it's open in that it represents, by whatever mechanism the country's set up, it recognizes their community that they want to send to the table. Small countries have the same vote as big countries. Small markets have the same vote as big markets. That's open. How about W3C? That was actually used as an example. I'm on the advisory board at W3C. I'm very supportive of W3C, but W3C is a benevolent monarchy. Decisions at W3C are not made by any collegial vote. They are made by the director, Tim Berners-Lee. Now, because we trust Tim Berners-Lee and because he has his whole life done what's right for the world, we see W3C as a really good place to work. But is that open? Well, again, if you're at the open end of the continuum, you can debate that. But I'll tell you this. While you may want to debate the open end of the continuum, you damn well know what's closed. A product that can only be provided by a single vendor. A specification that describes a product that comes from a single place. Something that is developed in a closet without inviting all interested parties and all stakeholders is closed. We know what closed is, and those that are benefited by open know what closed is, and those that are closed know that open is not in their interest. Okay.


Let us now look at the direct operating cost which is what the airlines are mostly concerned with. Now the direct operating cost basically consists of costs which are related or associated with the operation of the aircraft. Some of the important terms and a typical pie chart is shown here. So we will have a look at a model given by the association of European Airlines or AEA. This is a widely used model in literature which is used to estimate the direct operating cost of a particular aircraft while operating on a particular route. Now the AEA method has three main components.  So the inputs to the AEA model or the AEA DOC method is the mission data. The stage length in nautical miles is the distance that the aircraft is going to travel between the origin and the destination. The block fuel and the block hour are respectively the total fuel that has that is expanded and the total time that is spent from chocks 1 to chocks 2 and number of passengers because there are certain costs which are associated with handling of each passenger at the airport. So with these mission data you also have to give in the weight data. You have to give the maximum takeoff weight of the aircraft and you have to give the engine weight in tons and you know the engine parameters that have to mw stands for the empty weight of the aircraft. So these three data have to be given. Then you have engine parameters like the number of engines, what is the sea level static thrust of each engine, what is the bypass ratio, what is the overall pressure ratio and number of compressor stages. These parameters are used to get a handle on the cost of the engine, engine maintenance. Then you have the price data that means the price of the engine then there is a manufacturer study price or MSP which basically stands for the price that the airline is going to has incurred in procuring the aircraft. There is an airframe cost which is the cost of the hull which is to be insured and then there is a fuel price for gallon. So the input to the AEA DOC method are the mission data, the weight data, the engine data and the price data. The assumptions are regarding the density of the fuel which is typically taken as 6.7 pounds per US gallon and the labour rate which is specific dollars per hour. Now these numbers may differ from country to country but for a uniformity we assume these values. So when I say that the operating cost as per the AEA method is so much then everybody knows that these are the assumptions which have been considered while arriving at these particular values. The results of the AEA method are in terms of various cost elements. The first one is the financial cost or the cost of financing the operation of the aircraft which includes depreciation of the aircraft, interest on the money that has been borrowed to purchase the aircraft and insurance on the hull of the aircraft. You also then have maintenance costs which are the cost for maintaining the airframe and cost for maintaining the engine. And then you have the costs which are associated in with the flight that is the cockpit crew, the cabin crew, the navigational charges, the landing fees and the fuel. And there are certain symbols given for each of these items like DEP, INT, INS, CPC etc. and all the costs are calculated in dollars per trip, US dollars per trip. So you can also do it at US dollars per trip per passenger or US dollars per nautical mile per passenger. There are various parameters available to compare. And the costs which are associated with the maintenance of the aircraft and the flight of the aircraft are called as COC that is the carrier operating cost. This is the cost that the carrier or the airline actually incurred. And if you add to that the financing cost we call it as the direct operating cost because the financial costs are associated also with the operation of the aircraft. I mean whether you fly the aircraft or not you might have to incur the costs on depreciation, interest and insurance. So the maintenance and the flight costs are directly a function of the operation. But the fact that you have to also incur the finance charges, therefore these numbers are included in the direct operating cost. It may be kept in mind that the study mission is not the same as the design mission. The aircraft actually are sized by their design mission keeping in mind the payload and range requirement. But the operational routes which the aircraft will actually fly can be much shorter than design mission. So therefore when we do the calculation of the operating cost we have to look at a representative or an average mission. Now how do we use that? So for that there are some guidelines available. So depending on the aircraft category whether it is a short, medium, long or very long one can look at the design mission. And there are some numbers given for if it is a short range mission then you must use the range as 500 nautical miles, medium will be 1000, long will be 3000 and extra long will be 4000. Although the aircraft can travel much larger but for the study mission we have to assume these values. And in the mission, the mission payload is usually the aircraft design payload which is a standard passenger payload. We should use a study mission with a standard payload that would give a good estimate about the DOC. Let us look at various important elements. The first, the first and the most important aspect about the AEA method is that it has to start by estimating how many trips are possible in a year with that particular aircraft. So that is called as utilization. It is called a utilization. So utilization basically is available hours in a year upon the block time plus turn around time. Block time being the time between the chocks on and the chocks off that means the time for a particular flight of the study mission and turn around time is the time between two flights. Now the turn around time or the TAT is a function of loading, maintenance, refueling, etc. And these values depend upon the extra type and on the operation. So the available hours in a year cannot be taken simply as 24 hours into 365 days. Depending on the study mission, the available hours have to be taken as either 4000 hours in a year or 5100 or 650 depending on the study mission range. And the turn around time also based on experience has to be considered as mentioned in this particular table. So the AEA method gives you numerical values for all parameters which have to be considered. And let us start looking at the estimation of the cost one by one. So the total investment on the aircraft is basically the cost of the aircraft and the cost of the initial spare. So for this there is a parameter called as the manufacturer study price MSP which is typically a study variable as we will see later. And then you have some basic airframe spares. It is assumed that around 10 percent of the airframe spares of the airframe price has to be kept. So what you do is from the manufacturer study price you delete the cost of engines that is the engine price per engine into the number of engines and take 10 percent of that that would be the airframe spares. For the engines we assume that the spares are going to be 30 percent of the total engine price. So you multiply the engine price with the number of engines and take 30 percent of that and that is the cost that is the cost we need to block towards the spare parts for the engines. The total financial costs are basically equal to the financial overheads. So there it will be depreciation will be the first one. So this particular formula for depreciation assumes a straight line depreciation. So the aircraft is utilized for so many hours and we assume that this aircraft has got a life of approximately 14 years. So the total investment on the aircraft is to be recovered over 14 years and in each year there is a utilization which we have already estimated as mentioned earlier depending on the range of the study mission. Towards financing we assume that 5 percent of the total investment per utilization is to be paid towards interest and 0.6 percent towards the cost of ensuring the aircraft. So we look at now the crew costs. The crew costs are basically the cost of the current crew and the reserve crew. So assuming that there is a 2 percent cockpit and the cost is $380 per block hour, you just multiply the block time with $380 and if you assume that $60 per block hour per cabin crew member, these are numbers which have come from experience and these numbers may be different for different countries in real life. But for a common platform for comparison purposes, we use the AEA method and there we use these particular numbers. We look at the maintenance cost now. So there is a long formula for estimation of the airframe labor and there is also a formula for estimation of the material and this is in terms of various parameters such as the airframe weight in tons, the labor rate, the manufacturer's empty weight to the total block time and the airframe price which is basically the MSP minus the cost of the engine. So looking at the value of these parameters, you can calculate the cost. Now engine maintenance costs, they depend upon the engine type. So you could have a turbojet or turbofan aircraft or you may have a turboprop or a propfan aircraft. There will be different formulae for labor, material and total and these formulae involve many, many parameters like C1, C2, C3, etc. And there are formulae available for calculating all these parameters. I do not want to go into the details of these. These are methods which have to be coded on a spreadsheet or in a program and once you use these formulae, you should be able to get an estimate for the engine maintenance cost pretty straightforward. Regarding the fuel, we assume that the density of fuel is 6.7 pounds per US gallon or 0.803 kg per liter and just block fuel divided by 6.7 will give you the total amount of fuel available, total gallons of fuel and then you just multiply by the fuel price per gallon. Now the price of the fuel varies considerably. This graph shows the variation in the fuel price from January 2003 to September 2006. And what we notice is that in September 2003, the price was approximately 1 US dollar per gallon. But the moment we came to September 2006, just 3 years later, the price has doubled to more than 2 dollars per gallon. So, a tax on the fuel is likely to be the method for taxing the emissions in the future and fuel price is normally considered as a study variable because you vary the fuel price and you see the effect of that as we will show later in one example. So, let us see one example of calculation of the DOC. This example has been given so that the students can prepare a code to calculate the values of the DOC components and compare. In this example, you notice that the fuel price is not fixed its variable because we are going to look at the effect of fuel price being 1 US dollar per gallon or 2 US dollar per gallon or 3 per gallon. Like that we are going to look at various cases. And certain items like the propeller diameter, propeller blade is not applicable for this aircraft similarly short horsepower. So, let us see for this particular example, depending on the cost of the fuel, whether it is 1, 2.5 or 4 dollars per US gallon, you get different breakup of various items. Notice that the fuel price is going to only affect the value of the cost of the fuel. Everything else is going to remain the same. So, there is no change. And because of that, because fuel price is a substantial element in the cost calculation. In fact, if the fuel price is 2.5 or 4, the fuel cost per trip is the largest component of the cost. So, therefore, you can see that the carrier operating cost increased from 6.2 to 8.35 to 10.48 cents per seat nautical mile. And if you look at the DOC, they go up from 12.27 to 14.42 to 16.57 just because of the change in the fuel price. So, fuel price change is a huge contributor to the change in the DOC. So, one can use these results to validate your method, make your own procedure and plug in these numbers and check that you get the same answers. The same information is shown graphically. We have the first, so in this particular figure, remember the blue are the financials and they will not be there in the COC because DOC is COC plus financials. So, these blue elements which are the three cost terms which constitute nearly half in case of the fuel cost being 1 dollar per gallon are absent in the COC. When you go for 2.5 dollars per gallon as a part of the pie chart, you can see that the financials are going to be reducing and the operating costs are going to be larger. This one is the fuel cost, this one is the fuel cost and if you make it 4 dollars per gallon, then the financials reduce further and the fuel cost is the larger part of the pie chart. So, the red values are the flight cost, the green ones are the maintenance cost and the blue are the financial cost in this particular comparison. So, when you do the analysis of operating of the airline, you use COC that is the carrier operating cost, but when you do design studies, we use the DOC. Thanks a lot.