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Faro
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Life Maintenance Costs: > Or < Than Purchase Cost?

Sat Jan 23, 2010 10:32 am

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
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Nicoeddf
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RE: Life Maintenance Costs: > Or < Than Purchase Cost?

Sat Jan 23, 2010 11:52 am

For engines thats certainly true.

Not sure about frame.
 
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Laddie
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RE: Life Maintenance Costs: > Or < Than Purchase Cost?

Sat Jan 23, 2010 4:11 pm



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).
 
AA737-823
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RE: Life Maintenance Costs: > Or < Than Purchase Cost?

Mon Jan 25, 2010 6:17 am

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.
 
cobra27
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RE: Life Maintenance Costs: > Or < Than Purchase Cost?

Mon Jan 25, 2010 11:24 am

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?
 
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Faro
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RE: Life Maintenance Costs: > Or < Than Purchase Cost?

Mon Jan 25, 2010 1:12 pm



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
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keta
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RE: Life Maintenance Costs: > Or < Than Purchase Cost?

Tue Jan 26, 2010 11:45 am



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...
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