Microwave power standard is significantly limited by thermostat quality (± 1 mK/h), bolometer load efficiency (absorbers) and characteristics of adiabatic line due frequency bandwidth. Several years ago, air gap was applied on coaxial adiabatic line in order to drive down heat effects. In this paper, the focus will be on further analysis of coaxial line with an applied air gap. With the finite element method tool, analysis of S - parameters for different air gap dimensions and flange radius will be carried out. The paper will present simulation model and achieved results as a first step in the development of microwave power standard at the University of Zagreb.