This document discusses various techniques for evaluating and selecting aircraft, including cost per trip and cost per seat matrices, the U curve technique, optimum operating curves, and profit and unutilized market share matrices. It notes that while manufacturers like Airbus and Boeing use cost matrices to promote their own aircraft, airlines should evaluate their own needs based on factors like demand and network to define the optimum aircraft using techniques like the optimum operating curve. The document compares the power of different evaluation techniques and notes the importance of these methods for aircraft selection.

1. 22 study
Mohammed Salem Awad
Research Scholar – Aviation Management
Aircraft Evaluation & Selection
U
sually civil aircraft manufacture companies
implementing the best optimum solutions
for airlines, as they are try to convince
these airlines by the preference of their products
Relative direct operating cost 500nm average sector
(aircrafts) namely Airbus Industries, Boeing
Group, Embraer , and ATR. While the recent 30
fierce competitive between Airbus and Boeing to Fokker 100
98
capture a major market share in aviation industry.
So consequently both parties recruit the
best expertise in marketing and sales skilling
techniques to secure transactions of millions 15 A319
dollars and any failures from any party means MD-95
124
losing these millions. And accordingly they Relative 106
A320 -200
use cost per trip and cost per seat matrix as cost per 150
an important tool for evaluating and selecting seat, % 737- 600 MD-88 A321 -200
1108 142
aircrafts, and to position their products in the 0 183
737- 700 -14%
competitive market, so each one developed his 126
own analysis, that governs by the slogan “we -8%
A321 -100
183
are the best in the airline industry” leading to an 737-800
contrary results for Airbus industries and Boeing
‫و‬
162
Group as shown in figure (1), this encourage -15
us to wrap up and list the modern economic,
scientific techniques for aircraft evaluation and
selection.
-15 -10 -5 0 5 10 15 20 25 30 35 40 45
The Problem Relative trip cost, %
By studying cost per trip and cost per seat
matrix for Airbus Industries and Boeing
Group we get contrary matrixes, as each
party insist by preference of their products
(Aircrafts) in spite, the analysis address the Relative direct operating cost per seat 500nm average sector
same stage length, for the same type of
+20%
aircrafts, but with a different assumption of
the manufactures as shown in figures (1). 737-700
+10% A319
MD-83 MD-90
737-800 757-200
Datum
A320
The technology gap
-10% A321
-10% Datum +10% +20% +30%
Relative direct operating cost per trip
Figure (1) Cost per trip vs per seat Matrix For Boeing & Airbus
CAMA Magazine | issue 15 | June, 2012

2. study 23
Methods of Aircrafts Evolution and Selection U Curve Technique The main advantage of this approach is
Actually cost per trip and cost per seat This is a mathematical model, where the to position the fleet of the company by
matrix is a main important method for aircraft decision making is done based on the lowest defining the existing cost and configuration
evaluation in the recent time but there are cost level, there curve is driven basically by two with the corresponding value of optimum
many unmentioned methods that are not cost elements, the first one is cost of offering operating curve. As shown in figure (5).
public yet, so basically the outcomes of service (cost of offering seat) while the second
evaluation methods stand for what an analyst one is the cost of losing opportunity (cost of
looking for to explore it for top management, losing revenue due to unavailability of seat)
A321
some of these methods are listed below: where the right aircraft capacity can be define B737-800
• Value Analysis by the market size (passengers demand),
Capacity (Seat)
A320
• Cost per Trip and Cost per Seat Matrix applicable fare, and average stage length.
• U Curve Technique The main characteristics of this analysis
• Optimum Operating Curve is solving the dilemma of capacity or B737-700 A319
• Profit and Unutilized Market Share Matrix frequency as these two factors having a A318
great impact on operation of airlines, so by
Value Analysis increasing the capacity of aircraft, we are
It is one of a main statistical analysis in expected the reduction in frequencies and Cost per ATK
aviation science, which addressing and reflect vice versa so the analysis can be define Figure (5) Optimum Operating Curve
the technical parameters of the proposed the right capacity with optimum frequency
aircraft with respect of its price according to in one shoot. As it is shown in figure (4).
the relation of coefficient of correlation, so a Profit and Unutilized Market Share Matrix
graphical analysis is constructed and a best The pre-mentioned methods (2, 3, and 4) are
line of fit is established which divide the area applicable for point to point operating model
into two parts, the upper one is attractive, while this method can be use for multi stops
while the lower one is disappointment, operating model, the cost element is already
and accordingly it is easy to compare and
C Total Cost calculated with the profit and the market
the select the best aircraft based on their size include with unutilized market share.
Cost in US$
technical performance with respect the So these two main elements can position
market price as it is shown in figure (2). B Cost this matrix to define the right aircraft and the
of Lose A Cost of Services right sector to operate. As in shown (6).
Opportunity
Route: JED - SAH - DXB - CGK
Attractive
0.3
Relative Values
Selected Parameter 0.2
Relative Market Opportunity
A310-300
Figure.(4). U Curve Technique
0.1
0.0 A330-200
Disappointment Optimum Operating Curve
Airlines can be define by its own -1.2 -0.8 -0.4 0.4 0.8 1.2
main three parameters: -0.1
Aircraft Price
First: Market Size -0.2
Figure (2) Value Analysis
Second: Applicable Fares
Third: Average Stage Length -0.3 B737-800
Cost per Trip and Cost per Seat Matrix:
While the operating cost is used as step
This is the classical method implementing by
function with defined stages (0.1 to 1) and
aircraft manufactures, and it is an approved Relative Profit
accordingly we can define and develop an
and public method that used widely, so it Figure (6) Decision Matrix - Right Aircraft
optimum operating curve of the airline.
is a tool for the aircraft manufactures to
convince the airlines by the preference of
their products, usually an expert team is
assigned to collect, analysis data of the airlines
in two financial cost elements first is Cost of Comparison of the Aircraft Evaluation Techniques
Seat and the second is Cost per trip for the Table No. (1): Comparison of the Aircraft Evaluation Techniques
design network, and they work it out so that
it adapts and fits their benefits, this is clearly No. Methodology Implementing situation Mathematical Power of
Model Analysis
shown in figure (1) the contrary of Airbus
Industries and Boeing Group, while the basic 1 Value analysis Studying technical specification Statistical Model XXX
used of this method is shown in figure (3). 2 Cost per trip and cost per seat Matrix Point to point operating model Spread Sheet XXXX
Solution
15% 3 U Curve Technique Point to point operating model Linear Program XXXXX
RELATIVE UNIT COST (PER SEAT)
4 Optimum Operating Curve Point to point operating model Linear Program XXXXX
Type X shortened
10%
Decrease
unattractive 5 Profit and Unutilized Market Share Matrix Multi-stops operating Model Linear Program XXXXX
aircraft
size
area
5% Summary
The study pointed out the importance of these techniques for Aircraft evaluation and
selection. Also we don’t recommend to relay on what aircraft manufacture suggest, as
0% they are marketing their product to secure selling their aircraft, as by the end of the day,
Type X Increase
aircraft they are looking to secure the aircraft selling bids. So accordingly airlines should acts to
size
-5% evaluates their needs based on their demand and operating network to define the optimum
operating curve, which reflects and consider as the thumb that define the airline, and its
New
Technology Type X shortened existing fleet, which positioning and evaluate the current fleet financially, also it is indicate
-10% clearly the preference and importance of optimum operating curve and profit – unused
-10% -5% 0% 5% 10% 15% 20%
Source: Corporate Fleet Strategy and Aircraft Evaluation relative cost per trip market share matrix for evaluation and selection of aircrafts.■
Figure (3) Cost per Trip and Cost per Seat Matrix
CAMA Magazine | issue 15 | June, 2012

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