The Costs of Aging Aircraft: Insights from Commercial Aviation

Publication Date: September 2005

Publisher: Pardee Rand Graduate School

Author(s): Matthew C.. Dixon

Research Area: Military and defense

Type: Report

Abstract:

Aging aircraft are a primary concern to the Air Force. Understanding the impact age has on maintenance costs is critical to “repair versus replace” decisions. Air Force data, however, provide a limited view of the true age effect. The commercial sector keeps uniquely different data on maintenance costs and the Department of Transportation collects these data from U.S. airlines. These annual fleet data, combined with age information from the Boeing Company, provide a unique view of the cost to maintain commercial fleets. These data suggest that on average, fleet maintenance costs continue to increase as they age, but the rate of increase slows over time. Additionally, the data suggest that the type of aircraft and the airline of operation do not have a significant impact on the age effect. However, the age effect is significantly different at various periods of a fleet’s life. Boeing uses “maturity curves,” derived from years of manufacturing experience, to describe how maintenance costs change as aircraft age. The analysis in this dissertation provides a unique perspective of these maturity curves by utilizing alternative models, including fixed effect regression.