The differential in aircraft prices and operating economics between aircraft is only one factor in a planning decision.  Fleet commonality and additional initial and on-going expenses must also be taken into consideration to obtain a true economic picture of how cost-effective an aircraft will be from an overall perspective.

Some carriers, like Southwest, have chose the path of a single aircraft type for their operations, while others, like , have chosen two types of aircraft to better match aircraft to market demand and serve smaller markets with “right sized” aircraft.  While there is no correct answer, examining such a decision on an apples to apples basis requires a rigorous quantitative analysis.

The new AirInsight study, Market Analysis of the 100-149 Seat Segment, concludes that new the costs of commonality are relatively small when compared with the economic benefits of new technology aircraft, and ceteris paribus, only account for about 1.5-2% of operating costs over the life of an aircraft.  As a result, if a new technology aircraft offers a 10% advantage, the vast majority of that gain will fall to the bottom line.

In the study, AirInsights economic analysis took into account a number of factors, as we compared adding 10 aircraft of the same type to an existing fleet versus 10 aircraft of a different type.  This “apples to apples” comparison highlights the differences in commonality and the magnitude of the financial impacts.

Our analysis took into account the following factors:

  •  Initial provisioning of spares
  • Initial training for pilots and mechanics
  • One-time costs for regulatory and transition materials
  • On-going costs of additional staffing
  • On-going costs of recurrent training and other items

The analysis found that a new type requires additional spares, as well as training more pilots than for an existing type because of the “waterfall” effect in which captains are promoted from within, and transition training from one type to another would be required in addition for a new type in addition to the training of new pilots required for both types.  It also considered that staffing levels for a smaller sub-fleet would require slightly higher crew ratios per aircraft, and other differences in cost.

The results showed that a sub fleet of new technology aircraft would achieve full payback of any incremental costs in about 12-15 months, and generate significant savings over the life of the aircraft given the differential in operating costs.  With a payback of only about a year, a sub fleet of more efficient aircraft appears to make solid sense for an airline trying to right size its fleet.

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