IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v69y2018icp224-234.html
   My bibliography  Save this article

Examination of cost-efficient aircraft fleets using empirical operation data in US aviation markets

Author

Listed:
  • Park, Yongha
  • O'Kelly, Morton E.

Abstract

Efficient fleet configuration is a critical problem for air carrier management. This study is primarily concerned with empirical aircraft operating costs and examines the optimal fleet adapted to numerous flight routes longer than 1000 nautical miles. An aircraft-specific operating cost model is derived to estimate market average direct operating costs (DOC) of 22 aircraft types operated by 22 US airlines. It is used as a base in a fleet configuration optimization model to figure out the variability of optimal fleets for segment markets of varying sizes and lengths as well as in response to the dynamics of market circumstances. While recognizing the superior fuel burn performance of narrow-body aircraft such as Boeing 737 and Airbus A320 series, we find operating cost efficiency of wide-body aircraft (B777 and A330 series) due to the economies of scale in the non-fuel operating costs associated with aircraft size. There is a possible reduction of DOC by substituting the wide-body aircraft for smaller ones that are dominant in the current US domestic markets. And the cost efficiency of the wide-body fleet is more robust in dense and longer distance markets (particularly longer than 2000NM), especially considering fuel price fluctuations. Finally, the optimal fleet analysis with empirical traffic data suggests a mixed-size aircraft fleet, configured with narrow- and wide-body aircraft, as an alternative for a wide range of segment markets that vary in size and length.

Suggested Citation

  • Park, Yongha & O'Kelly, Morton E., 2018. "Examination of cost-efficient aircraft fleets using empirical operation data in US aviation markets," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 224-234.
    • Handle: RePEc:eee:jaitra:v:69:y:2018:i:c:p:224-234
    DOI: 10.1016/j.jairtraman.2017.02.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699716302204
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jairtraman.2017.02.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    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.
    2. Takebayashi, Mikio, 2011. "The runway capacity constraint and airlines' behavior: Choice of aircraft size and network design," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(3), pages 390-400, May.
    3. Givoni, Moshe & Rietveld, Piet, 2009. "Airline's choice of aircraft size - Explanations and implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(5), pages 500-510, June.
    4. Park, Yongha & O’Kelly, Morton E., 2014. "Fuel burn rates of commercial passenger aircraft: variations by seat configuration and stage distance," Journal of Transport Geography, Elsevier, vol. 41(C), pages 137-147.
    5. Hong, Sungwook & Harker, Patrick T., 1992. "Air traffic network equilibrium: Toward frequency, price and slot priority analysis," Transportation Research Part B: Methodological, Elsevier, vol. 26(4), pages 307-323, August.
    6. Chao, Ching-Cheng & Hsu, Ching-Wen, 2014. "Cost analysis of air cargo transport and effects of fluctuations in fuel price," Journal of Air Transport Management, Elsevier, vol. 35(C), pages 51-56.
    7. O'Kelly, Morton E., 2014. "Air freight hubs in the FedEx system: Analysis of fuel use," Journal of Air Transport Management, Elsevier, vol. 36(C), pages 1-12.
    8. Givoni, Moshe & Rietveld, Piet, 2010. "The environmental implications of airlines' choice of aircraft size," Journal of Air Transport Management, Elsevier, vol. 16(3), pages 159-167.
    9. Schipper, Youdi, 2004. "Environmental costs in European aviation," Transport Policy, Elsevier, vol. 11(2), pages 141-154, April.
    10. Babikian, Raffi & Lukachko, Stephen P. & Waitz, Ian A., 2002. "The historical fuel efficiency characteristics of regional aircraft from technological, operational, and cost perspectives," Journal of Air Transport Management, Elsevier, vol. 8(6), pages 389-400.
    11. Hansen, Mark, 1990. "Airline competition in a hub-dominated environment: An application of noncooperative game theory," Transportation Research Part B: Methodological, Elsevier, vol. 24(1), pages 27-43, February.
    12. Swan, William M. & Adler, Nicole, 2006. "Aircraft trip cost parameters: A function of stage length and seat capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 42(2), pages 105-115, March.
    13. Tsoukalas, Gerassimos & Belobaba, Peter & Swelbar, William, 2008. "Cost convergence in the US airline industry: An analysis of unit costs 1995–2006," Journal of Air Transport Management, Elsevier, vol. 14(4), pages 179-187.
    14. Li, Zhi-Chun & Lam, William H.K. & Wong, S.C. & Fu, Xiaowen, 2010. "Optimal route allocation in a liberalizing airline market," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 886-902, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kiracı, Kasım & Akan, Ercan, 2020. "Aircraft selection by applying AHP and TOPSIS in interval type-2 fuzzy sets," Journal of Air Transport Management, Elsevier, vol. 89(C).
    2. Jingjing Hao & Ling Zhang & Xiaofeng Ji & Xiaolong Wu & Lan Liu, 2020. "Investigating the Accessibility between Civil Airports and Tourist Locations in Tourist Cities in Yunnan Province, China," Sustainability, MDPI, vol. 12(10), pages 1-22, May.
    3. Burns, Porter & Bowen, John, 2024. "Global network structure and emissions implications of long-thin airline routes," Journal of Air Transport Management, Elsevier, vol. 115(C).
    4. Manoela Cabo & Elton Fernandes & Paulo Alonso & Ricardo Rodrigues Pacheco & Felipe Fagundes, 2019. "Energy Effectiveness of Jet Fuel Utilization in Brazilian Air Transport," Sustainability, MDPI, vol. 12(1), pages 1-16, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Singh, Jagroop & Sharma, Somesh Kumar & Srivastava, Rajnish, 2019. "What drives Indian Airlines operational expense: An econometric model," Journal of Air Transport Management, Elsevier, vol. 77(C), pages 32-38.
    2. Tu, Ningwen & Li, Zhi-Chun & Fu, Xiaowen & Lei, Zheng, 2020. "Airline network competition in inter-continental market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    3. Saraswati, Batari & Hanaoka, Shinya, 2014. "Airport–airline cooperation under commercial revenue sharing agreements: A network approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 17-33.
    4. Defilippi, Enzo, 2019. "The environmental cost of Peru's domestic air transport: An appraisal," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 144-151.
    5. Park, Yongha & O’Kelly, Morton E., 2014. "Fuel burn rates of commercial passenger aircraft: variations by seat configuration and stage distance," Journal of Transport Geography, Elsevier, vol. 41(C), pages 137-147.
    6. Adler, Nicole & Martini, Gianmaria & Volta, Nicola, 2013. "Measuring the environmental efficiency of the global aviation fleet," Transportation Research Part B: Methodological, Elsevier, vol. 53(C), pages 82-100.
    7. Sheng, Dian & Li, Zhi-Chun & Xiao, Yi-bin & Fu, Xiaowen, 2015. "Slot auction in an airport network with demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 82(C), pages 79-100.
    8. Lay Eng Teoh & Hooi Ling Khoo, 2016. "Fleet Planning Decision-Making: Two-Stage Optimization with Slot Purchase," Journal of Optimization, Hindawi, vol. 2016, pages 1-12, June.
    9. Sibdari, Soheil & Mohammadian, Iman & Pyke, David F., 2018. "On the impact of jet fuel cost on airlines’ capacity choice: Evidence from the U.S. domestic markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 111(C), pages 1-17.
    10. Pels, Eric, 2021. "Optimality of the hub-spoke system: A review of the literature, and directions for future research," Transport Policy, Elsevier, vol. 104(C), pages 1-10.
    11. Adeline Montlaur & Luis Delgado & César Trapote-Barreira, 2021. "Analytical Models for CO 2 Emissions and Travel Time for Short-to-Medium-Haul Flights Considering Available Seats," Sustainability, MDPI, vol. 13(18), pages 1-23, September.
    12. Presto, Felix & Gollnick, Volker & Lau, Alexander & Lütjens, Klaus, 2022. "Flight frequency regulation and its temporal implications," Transport Policy, Elsevier, vol. 116(C), pages 106-118.
    13. Hansen, Mark & Liu, Yi, 2015. "Airline competition and market frequency: A comparison of the s-curve and schedule delay models," Transportation Research Part B: Methodological, Elsevier, vol. 78(C), pages 301-317.
    14. Zuidberg, Joost, 2014. "Identifying airline cost economies: An econometric analysis of the factors affecting aircraft operating costs," Journal of Air Transport Management, Elsevier, vol. 40(C), pages 86-95.
    15. Li, Zhi-Chun & Lam, William H.K. & Wong, S.C. & Fu, Xiaowen, 2010. "Optimal route allocation in a liberalizing airline market," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 886-902, August.
    16. Adler, Nicole & Pels, Eric & Nash, Chris, 2010. "High-speed rail and air transport competition: Game engineering as tool for cost-benefit analysis," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 812-833, August.
    17. Zakharenko, Roman & Luttmann, Alexander, 2023. "Downsizing the jet: A forecast of economic effects of increased automation in aviation," Transportation Research Part B: Methodological, Elsevier, vol. 170(C), pages 25-47.
    18. Chow, Clement Kong Wing & Tsui, Wai Hong Kan, 2017. "Organizational learning, operating costs and airline consolidation policy in the Chinese airline industry," Journal of Air Transport Management, Elsevier, vol. 63(C), pages 108-118.
    19. Chao, Ching-Cheng & Hsu, Ching-Wen, 2014. "Cost analysis of air cargo transport and effects of fluctuations in fuel price," Journal of Air Transport Management, Elsevier, vol. 35(C), pages 51-56.
    20. Adler, Nicole & Andreana, Gianmarco, 2024. "Aiding airlines for the benefit of whom? An applied game-theoretic approach," European Journal of Operational Research, Elsevier, vol. 314(2), pages 552-564.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jaitra:v:69:y:2018:i:c:p:224-234. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-air-transport-management/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.