Aircraft replacement strategy: Model and analysis

This study presents a model to help airlines plan their strategic fleet acquisitions and disposals. It minimizes the discounted costs of owning or leasing and operating a fleet by identifying which aircraft to buy, sell and lease over the planning horizon. The paper explains how the related cost data were compiled and analyzed. The model is applied to two US airlines with different business models and shows that aircraft leasing is generally the preferred alternative with benefits from having newer aircraft and less fleet diversity.

► A model is developed to identify the number of aircraft to buy, lease and sell.
► The study of two US airlines highlights data compilation methods from various sources.
► Leasing aircraft is better than buying buy and fleet diversity reduces efficiency.