Laxintl From United States of America, joined May 2000, 27684 posts, RR: 50
Reply 1, posted (10 years 4 months 2 weeks 17 hours ago) and read 13653 times:
What do you mean by depreciation rate?
Do you mean the way airlines account for them on the their books.. ie straightline, 15 year, 20 year etc.. or do you want to know what the book value of a particular aircraft is?
From the desert to the sea, to all of Southern California
Monteycarlos From Australia, joined Mar 2005, 2107 posts, RR: 27
Reply 4, posted (10 years 4 months 2 weeks 17 hours ago) and read 13602 times:
Good morning United Airline!
I'll give you a couple of formulae to work with, because it sort of depends on a few things.
Flat rate depreciation, where Dpn = Annual rate of depreciation, C = cost of asset (list price if you will), R = residual value of the asset (i.e. scrap value) and N = useful economic life in years.
Gives the formula: Dpn = (C - R) / N
The other method (reducing balance) involves taking a certain set depreciation percentage and doing that over the written down value of the asset for each year... I suggest you see this website which gives a worked through example.
What you may need help with is finding residual values for A320 family aircraft and for B737NG family aircraft. For this, you may need to have a look at Flight International or another published press source... I'm not sure if you will get a reliable source of info for that here on a.net.
Well it will differ for each case... In fact the residual values will differ on a case by case basis and so will the cost of the asset... You're best bet is to try and find an average using list prices and an average residual value. Sorry but I don't have that kind of information to give you.