ABSTRACT

An aircraft's life cycle has four stages: design,

production, operation, and decommissioning. During
the operation phase, an airline's primary priority is the
maintenance procedure. This essay examines a case
study of an airline that is struggling with rising
maintenance expenses. The goal is to comprehend the
variables that lead to cost increases. The maintenance
cost factors were identified by an analysis of
maintenance costs, Average flight hours, Airframe
cost per aircraft Engine cost per aircraft. According to
the analysis, fleet age was correlated to direct
airframe maintenance costs and was confirmed
relationship between the average fleet age and direct
engine maintenance cost.
. Rajendran, Gobikumar
MBA first semester SAP NO:500127080

ASSIGNMENT-1
Analysis of Fleet Age and Maintenance Costs in
North-South Airline
 1

INTRODUCTION
The aviation sector is a cutthroat one. Airlines are attempting to reduce their operating costs in order to
be competitive in the market. According to Stephen ruth maintenance cost both Airframe and engine
areas has significant influences for Boeing B737-200 aircraft Ruth wanted to know the following:

(1) Whether the average fleet age was correlated to direct airframe maintenance costs, and
(2) Whether there was a relationship between the average fleet age and direct engine.

SCHEMETIC DIAGRAM OF OPERATION AND MAINTANCE

DATA OBSERVATION METHODS

First, Young had her staff construct the average age of Northern and Southeast B737-200 fleets, by
quarter, since the introduction of the aircraft to service by each airline in late 1994 and early 1995.

Each fleet's average age was calculated by first multiplying the total number of calendar days that each
aircraft had been in service at the pertinent point in time by the average daily utilization of the
respective fleet to the total fleet hours flown.

The total number of fleet hours flown was then divided by the number of aircraft in service at that time,
giving the age of the “average” aircraft in the fleet.

The average utilization was found by taking the actual total fleet hours flown on September 30 2001,
from Northern and Southeast data, and dividing it by the total days in service for all aircraft at that time.

The average utilization for Southeast was 8.3 hours per day, and the average utilization for Northern
was 8.7 hours per day.

Because the available cost data were calculated for each yearly period ending at the end of the first
quarter, the average fleet age was calculated at the same points in time.
 2

The fleet data is shown in the following table. Airframe cost data and engine cost data are both shown
paired with the average fleet age.

Northern Airline South-east Airlines

Airframe Engine Airframe Engine

Average Average
Year cost per Cost per cost per Cost per
age hours age hours
aircraft aircraft aircraft aircraft

1995 $51.80 $43.49 6512 $13.29 $18.86 5107

1996 54.92 38.58 8404 25.15 31.55 8145

1997 69.70 51.48 11077 32.18 40.43 7360

1998 68.90 58.72 11717 31.78 22.10 5773

1999 63.72 45.47 13275 25.34 19.69 7150

2000 84.73 50.26 15215 32.78 32.58 9364

2001 78.74 79.60 18390 35.56 38.07 8259

CORRELATION ANALYSIS
Correlation analysis is applied in quantifying the association between two continuous variables, for
example, a dependent and independent variable or among two independent variables.

Correlation coefficient (r) n∑xy- ∑x ∑y

√∑x2- (∑x)2 √n∑y2-(∑y)2

Airframe cost Northern Airlines

Airframe cost
Year Average age hours (Y) X^2 Y^2 ∑X1 Y1
per aircraft (X)

1995 51.80 6512.00 2683.24 42406144.00 337321.60

1996 54.92 8404.00 3016.21 70627216.00 461547.68
1997 69.70 11077.00 4858.09 122699929.00 772066.90
1998 68.90 11717.00 4747.21 137288089.00 807301.30
 3

1999 63.72 13275.00 4060.24 176225625.00 845883.00

2000 84.73 15215.00 7179.17 231496225.00 1289166.95
2001 78.74 18390.00 6199.99 338192100.00 1448028.60
∑ 472.51 84590.00 32744.15 1118935328.00 5961316.03

n∑xy- ∑x ∑y
Correlation coefficient (r)
√∑x2- (∑x)2 √n∑y2-(∑y)2

r 0.877157591

Airframe cost south-east Airlines

A
Airframe cost
Year verage age X^2 Y^2 ∑X1 Y1
per aircraft
hours
1995 13.29 5107.00 176.62 26081449.00 67872.03
1996 25.15 8145.00 632.52 66341025.00 204846.75
1997 32.18 7360.00 1035.55 54169600.00 236844.80
1998 31.78 5773.00 1009.97 33327529.00 183465.94
1999 25.34 7150.00 642.12 51122500.00 181181.00
2000 32.78 9364.00 1074.53 87684496.00 306951.92
2001 35.56 8259.00 1264.51 68211081.00 293690.04
∑ 196.08 51158.00 5835.83 386937680.00 1474852.48

n∑xy- ∑x ∑y
Correlation coefficient (r)
√∑x2- (∑x)2 √n∑y2-(∑y)2

r 0.624867994
 4

Linear Regression Equation

Engine cost Northern Airlines

Engine cost per Average

Year Y=mx+b
aircraft age hours

1995 43.49 6512.00 9993.408

1996 38.58 8404.00 8855.788

1997 51.48 11077.00 11844.65

1998 58.72 11717.00 13522.12

1999 45.47 13275.00 10452.16

2000 50.26 15215.00 11561.98

2001 79.60 18390.00 18359.9

n∑xy- ∑x ∑y
M
n∑x2- (∑x)2
∑y- m∑x
b
n
y mx+b
 5

REGRESSION STATISTIC
Engine cost per aircraft Average age hours Y=mx+b

20000.00
18000.00
16000.00
14000.00
12000.00
10000.00
8000.00
6000.00
4000.00
2000.00
0.00
1 2 3 4 5 6 7

Engine cost South-east Airlines

Engine cost Average age

Year Y=mx+b
per aircraft hours

1995 18.86 5107.00 7240.663

1996 31.55 8145.00 11714.3
1997 40.43 7360.00 11933.91
1998 22.10 5773.00 8273.209
1999 19.69 7150.00 9377.562
2000 32.58 9364.00 13049.83
2001 38.07 8259.00 12565.92
 6

REGRESSION STATISTIC

14000.00
12000.00
10000.00
8000.00
6000.00
4000.00
2000.00
0.00
1 2 3 4 5 6 7

Engine cost per aircraft Average age hours Y=mx+b

Conclusion

Description Correlation Conclusion

Correlation
Airframe cost Northern Airlines There Is direct correlation fleet age and
r= 0.877157591
airframe maintenance cost.
Airframe cost south-east Airlines There Is direct correlation fleet age and
r= 0.624867994 airframe maintenance cost.

Relation

Engine cost Northern Airlines There is Strong relation identified Engine cost
= b/w Avg fleet age

Engine cost south-east Airlines There is moderate relation identified Engine

cost b/w Avg fleet age