By Bjorn Fehrm

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Introduction

Sep. 21 2015, ©. Leeham Co: Comparing and evaluating operational and economic performance of competing airliners is a complex task that requires analysis of thousands of parameters.

It’s not unknown for smaller airlines to have limited capability to undertake these difficult analyses. Accordingly, they often rely on the Original Equipment Manufacturers (OEMs) for their analysis on behalf of the potential customer.

Unfortunately, the OEM’s have little incentive to provide an unbiased view of either their products nor those of their competitors.

Thorough evaluations require quite some preparations. If these preparations are not carried out correctly, the result can be biased to the extent that the evaluation method dictates which’s the best aircraft and not the most suitability aircraft for the task. We will in a series of articles cover how aircraft evaluations are done and how evaluation pitfalls can be avoided.

Summary:

• Aircraft evaluations are made for all direct operating costs that can be linked directly to the operation of the airliner.
• The costs can be divided in Cash Operating Costs (COC), which covers the operation of the aircraft and capital costs. Combined these costs constitute the Direct Operating Costs, DOC.
• The OEMs produce data for all COC cost items, but they do that in their own way. To make the costs comparable one need to know and understand their assumptions and neutralize these through independent modeling of the costs.
• We describe what these assumptions are and how to neutralize them.