FLY777UAL
Topic Author
Posts: 4830
Joined: Tue May 18, 1999 3:49 am

Leasing Rates Outweigh Operating Costs?

Sat Feb 08, 2003 5:00 am

I've been thinking about this for a while...

Assuming that the 737-800, MD-83, and A320 all hold roughly the same capacity and have the ability to fly (generally) the same types of routes, would it behoove an airline to choose the older jet, the MD-83 over its newer rivals?

Say the MD-83 has an operating cost of $4,000 per hour, and both the 737 and A320 have an operating cost of $3,000 per hour. Would the leasing rates on the 737 and A320 be high enough (or, looking at it another way, would the MD-83 be that much cheaper) to balance out the overall cost to be equal, or perhaps the MD-83 end up being cheaper?

Thanks,

F L Y 7 7 7 U A L
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Leasing Rates Outweigh Operating Costs?

Sat Feb 08, 2003 5:21 am

Some other things would be considered as well. Maintenance costs may be more for an older a/c, but the lease rate (and the down payment) would be less than for a newer a/c. Older a/c are more prone to MX issues than newer a/c, so dispatch reliability could be an issue as well. What really boils down to is how much can an airline afford to spend to lease an a/c or how much are they willing to spend?

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