Fleet Transition Costs: Much Ado About Nothing

The cost of transitioning fleet is often of great concern to operators

When it comes to renewing a fleet with the most technologically advanced aircraft, many non-Airbus operators express concerns about the complexity and costs involved in such transitions, however these misconceptions can be quickly clarified by taking a closer look at the true cost details associated with a fleet transition.

The two major cost elements in a fleet transition are spares and training. For spares, the best solution typically includes a minimum initial spare provisioning investment to cover the most critical needs. The rest would be covered by entering agreements with third parties providing access to spare part pools and to leased on-site stock.

When it comes to training, it is mainly required for mechanics, cabin crews and flight crews, the latter being the most costly as it requires simulator sessions.

A detailed cash flow analysis typically shows that transition costs represent a very small part of an airline’s direct operating costs. For example, a fleet of 20 to 30 aircraft has transition costs between 0.3% to 1% of fleet direct operating costs, while a fleet of 5 to 20 aircraft has transition costs between 0.5% to 2%; overall a lesser expense than initially perceived by most airlines.

Comparing these numbers to the impact of fuel price variations or the ageing effect on maintenance costs clearly indicates that it is much more profitable to switch to newer generation aircraft despite transition costs.

There are ways to significantly attenuate the burden of a fleet transition; particularly by adopting a stepped approach, one which Airbus has gained great experience.

So don’t fear the change, as ultimately the cost of operating the same old fleet may result to be much higher than the cost of change.

For more information contact:
Patrick Baudis
Vice President Marketing, Latin America & Caribbean
patrick.baudis@airbus.com