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Assessing the Role of Operating, Passenger, and Infrastructure Costs in Fleet Planning under Fuel Price Uncertainty

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  • Smirti, Megan
  • Hansen, Mark

Abstract

Aviation system planning is challenged by the rapid increase in fuel prices and uncertainty in air traffic management (ATM) charges. As airlines decrease capacity and decommission older aircraft and aviation navigation service providers ponder new ATM charging schemes, a critical question is: which aircraft provide air transportation service for the lowest cost? This study evaluates the introduction of a minimally utilized aircraft type in the United States, the 72-seat turboprop, compared with currently operated narrow body and regional jet aircraft. Homogenous fleets of these vehicles are compared for operating, passenger preference, and ATM costs over a range of fuel prices and the minimum cost fleet mix is determined. Findings include that the regional jet exhibits a higher cost per passenger than the turboprop for the entire fuel price and stage length space when operating costs are considered alone. When passenger costs are considered in addition to operating costs, there exists an equal cost per passenger curve between these two aircraft for fuel prices below $4.00/gallon. When infrastructure costs are considered, the fuel price and stage length space where the turboprop offers a lower cost increases. The comparison of the turboprop with the narrow body shows that an equal cost curve exists under all cost combinations considered. With the introduction of ATM charging, the flat landing fee favors the narrow body, while variable ATM charges increase the space where the turboprop offers the lower cost. This analysis shows that aircraft fleet selection is highly sensitive to fuel prices, passenger costs, and ATM charging schemes.

Suggested Citation

  • Smirti, Megan & Hansen, Mark, 2009. "Assessing the Role of Operating, Passenger, and Infrastructure Costs in Fleet Planning under Fuel Price Uncertainty," University of California Transportation Center, Working Papers qt3xt743cv, University of California Transportation Center.
    • Handle: RePEc:cdl:uctcwp:qt3xt743cv
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    References listed on IDEAS

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    1. Wenbin Wei & Mark Hansen, 2003. "Cost Economics of Aircraft Size," Journal of Transport Economics and Policy, University of Bath, vol. 37(2), pages 279-296, May.
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