Hi,
Variable cost is not my term. It's a well known term in both business and economics.
Variable cost - Wikipedia, the free encyclopedia
Variable costs vary as quantity changes (e.g. meals provided vary with the number of passengers). Fixed costs remain the same regardless of the number of passengers (e.g. maintenance required per hour of flying, or pilot's wages)
There is no point selling below variable cost (except perhaps for PR purposes - e.g. a loss leader). If you can not cover variable costs, your business will fail in the short run, because each additional passenger you add will lose you more money - it's better *not* to have any passengers.
If you can cover variable cost in the short run, but not your fixed costs, then you will fail in the long run. That's Economics (and business) 101.
To remain viable, both variable and fixed costs need to be covered.