The Costs of Aging Aircraft

Insights from Commercial Aviation

by Matthew C. Dixon

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Aging aircraft are a primary concern to the Air Force. Understanding the impact age has on maintenance costs is critical to “repair versus replace” decisions. Air Force data, however, provide a limited view of the true age effect. The commercial sector keeps uniquely different data on maintenance costs and the Department of Transportation collects these data from U.S. airlines. These annual fleet data, combined with age information from the Boeing Company, provide a unique view of the cost to maintain commercial fleets. These data suggest that on average, fleet maintenance costs continue to increase as they age, but the rate of increase slows over time. Additionally, the data suggest that the type of aircraft and the airline of operation do not have a significant impact on the age effect. However, the age effect is significantly different at various periods of a fleet’s life. Boeing uses “maturity curves,” derived from years of manufacturing experience, to describe how maintenance costs change as aircraft age. The analysis in this dissertation provides a unique perspective of these maturity curves by utilizing alternative models, including fixed effect regression.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Literature Discussion and Prior Work

  • Chapter Three

    Data and Analysis Methodology

  • Chapter Four

    Results

  • Chapter Five

    Potential Biases in Estimated Age Effect

  • Chapter Six

    Generalizations to the Air Force

  • Chapter Seven

    Conclusions

  • Appendices

Research conducted by

This document was submitted as a dissertation in September, 2005 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of Bart Bennett (Chair), Ed Keating, and Greg Ridgeway.

This report is part of the RAND Corporation Dissertation series. Pardee RAND dissertations are produced by graduate fellows of the Pardee RAND Graduate School, the world's leading producer of Ph.D.'s in policy analysis. The dissertations are supervised, reviewed, and approved by a Pardee RAND faculty committee overseeing each dissertation.

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