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A mathematical programming model for aircraft leasing decisions

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  • Chen, Wei-Ting
  • Huang, Kuancheng
  • Ardiansyah, Muhammad Nashir

Abstract

For the airline fleet planning problem, this paper formulates a mathematical programming model specifically also taking into account of the increasingly popular capital lease, which has some mixed features of the two traditional aircraft acquirement methods: operating lease and purchase. Given the aircraft requirements, budget, and debt-ratio limit, the objective is to minimize the total cost within the planning horizon. Numerical experiments were conducted to compare the optimal solutions for the airlines with different business models, scales, and experiences. This paper further simulates a scenario under the new standards which will be applied in 2019. The results of sensitivity analysis show that when the debt-ratio constraint is relaxed, capital leases would be helpful for reducing the cost of airlines.

Suggested Citation

  • Chen, Wei-Ting & Huang, Kuancheng & Ardiansyah, Muhammad Nashir, 2018. "A mathematical programming model for aircraft leasing decisions," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 15-25.
    • Handle: RePEc:eee:jaitra:v:69:y:2018:i:c:p:15-25
    DOI: 10.1016/j.jairtraman.2018.01.005
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    References listed on IDEAS

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    Cited by:

    1. Carmen TURLEA & George-Aurelian TUDOR, 2018. "The Leasing - Manager Instrument To Improve Companies Performance," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 12(1), pages 122-130, November.
    2. Chen, Wei-Ting & Wu, Cheng-Lung, 2023. "Aircraft acquisition optimization under demand and cost fluctuations: Before and after leasing standard changes," Journal of Air Transport Management, Elsevier, vol. 112(C).
    3. Francesco Bellandi, 2021. "Aircraft Wet Leases: Accounting Dissonance with Competitive Strategy and Travelers’ Perspectives," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(11), pages 214-214, July.
    4. Talwar, Chetan & Joormann, Imke & Ginster, Raphael & Spengler, Thomas Stefan, 2023. "How much can electric aircraft contribute to reaching the Flightpath 2050 CO2 emissions goal? A system dynamics approach for european short haul flights," Journal of Air Transport Management, Elsevier, vol. 112(C).
    5. Weiwei Lin & Jing Lu & Jinfu Zhu & Li Xu, 2022. "Research on the Sustainable Development and Dynamic Capabilities of China’s Aircraft Leasing Industry Based on System Dynamics Theory," Sustainability, MDPI, vol. 14(3), pages 1-19, February.
    6. Dang, Chuangyin & Herings, P. Jean-Jacques & Li, Peixuan, 2020. "An Interior-Point Path-Following Method to Compute Stationary Equilibria in Stochastic Games," Research Memorandum 001, Maastricht University, Graduate School of Business and Economics (GSBE).

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