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Life Maintenance Costs: > Or < Than Purchase Cost?  
User currently offlineFaro From Egypt, joined Aug 2007, 1534 posts, RR: 0
Posted (4 years 6 months 1 week 3 days 16 hours ago) and read 2751 times:

Over the entire life of an airliner (airframe + engines), would cumulative total maintenance costs (whether discounted to date of acquisition or not) exceed the aircraft's original acquisition cost?

Faro


The chalice not my son
6 replies: All unread, jump to last
 
User currently offlineNicoEDDF From Germany, joined Jan 2008, 1099 posts, RR: 1
Reply 1, posted (4 years 6 months 1 week 3 days 15 hours ago) and read 2737 times:

For engines thats certainly true.

Not sure about frame.


User currently offlineLaddie From United States of America, joined Jan 2010, 578 posts, RR: 8
Reply 2, posted (4 years 6 months 1 week 3 days 10 hours ago) and read 2686 times:



Quoting Faro (Thread starter):
Over the entire life of an airliner (airframe + engines), would cumulative total maintenance costs (whether discounted to date of acquisition or not) exceed the aircraft's original acquisition cost?

The acquisition cost goes beyond just buying an airplane (I'm thinking of commercial airplanes from a large OEM). The airline also buys training for their pilots and support from the OEM, among other things.

I doubt an airline looks at MX costs vs the acquisition cost. They are more likely to compare MX costs against the revenue that airplane is generating. The MX costs increase rapidly the older the airplane gets. After about 6 to 10 years, the MX checks for a commercial airliner in regular service (flying several flights every day), become more frequent and last longer. This is when the airline find the airplane does not "pay for itself." That's when the airline looks to sell the airplane to another airline that can afford the MX costs, or return the airplane to the lessor (if it was leased).


User currently offlineAA737-823 From United States of America, joined Mar 2000, 5731 posts, RR: 11
Reply 3, posted (4 years 6 months 1 week 1 day 20 hours ago) and read 2577 times:

Maintenance costs are outrageous.
Coffee makers for modern jetliners can run as much as $15k (US) a piece...
Other components, like auto pilot MCPs, can run in excess of $250,000.
Without going into any proprietary details, allow me to simply say that the lifetime cost of the aircraft makes the acquisition cost look laughably cheap.


User currently offlineCobra27 From Slovenia, joined May 2001, 1009 posts, RR: 0
Reply 4, posted (4 years 6 months 1 week 1 day 15 hours ago) and read 2548 times:

Does anybody have any info how much does it cost to operate an airliner over the lifetime including purchasem, fuel, maintenance, personnel, insurance, airport taxes..?
I reckon it could amoint well over half a billion $ FOR 747?


User currently offlineFaro From Egypt, joined Aug 2007, 1534 posts, RR: 0
Reply 5, posted (4 years 6 months 1 week 1 day 13 hours ago) and read 2526 times:



Quoting NicoEDDF (Reply 1):
For engines thats certainly true.

Not sure about frame.

I recall in a neighbouring thread somewhere that for the 773ER, the engines cost more than the basic airframe (I imagine the airframe without electrical/hydraulic/avionic systems/software and customer-specific equipment). If lifetime engine maintenance costs more than the engine acquisition cost, then you are well on your way to having total maintenance costs being more than the total aircraft acquisition cost.

Faro



The chalice not my son
User currently offlineKeta From Germany, joined Mar 2005, 448 posts, RR: 0
Reply 6, posted (4 years 6 months 1 week 15 hours ago) and read 2433 times:



Quoting Laddie (Reply 2):
I doubt an airline looks at MX costs vs the acquisition cost. They are more likely to compare MX costs against the revenue that airplane is generating.

I don't know if I got you right, so apologies if you don't mean this... you say that airplane acquisition cost have no impact in the operating costs? Anyway I hope some will find the following interesting.  Smile

The costs of operating an aircraft can be divided into Direct Operating Costs (DOC) and Indirect ones (IOC). The latter are basically related to administration, passenger services (VIP lounges..), sales, marketing, etc., and the airline is responsible of them. DOC depend on the aircraft, and they include navigation fees, crew, fuel, maintenance and aircraft price dependent costs (typical breakdown).

The percentage of each factor contributing to DOC vary from aircraft to aircraft and also depend on the mission and the period of time considered. I have no exact figures, all are guesstimates, but they all show about 10% for fees, then each of crew, fuel and maintenance 20% and finally aircraft price dependent costs account for the 30%. As can be seen, the aircraft sale price has a strong effect on DOC; based on the A.I. method for estimating DOC an example shows that a 10% cheaper aircraft leads to a 4.3% reduction in DOC. An operator would be pretty interested in a cheaper airplane.

If the above figures are overall correct, maintenance costs less than the aircraft, but for a small margin. The above is also under the assumption that the appreciation period is X years; if you rise the period, I guess price-dependent costs will diminish. I would love to have more exact numbers, though.

The breakdown of DOC makes you wonder how much pilots cost too...  Wink

Quoting Faro (Reply 5):
I recall in a neighbouring thread somewhere that for the 773ER, the engines cost more than the basic airframe (I imagine the airframe without electrical/hydraulic/avionic systems/software and customer-specific equipment). If lifetime engine maintenance costs more than the engine acquisition cost, then you are well on your way to having total maintenance costs being more than the total aircraft acquisition cost.

You're right, engines are very expensive! I could be wrong, but IIRC airframe, engines and electronics cost each 1/3 of the total price. Electronics aren't cheap either...



Where there's a will, there's a way
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