University of California Transportation Center

Aviation system planning, particularly fleet selection and adoption, is challenged by fuel price uncertainty. Fuel price uncertainty is due fuel and energy price fluctuations and a growing awareness of the environmental externalities related to transportation activities, particularly as they relate to climate change. To assist in aviation systems planning under such fuel price uncertainty and environmental regulation, this study takes a total logistic cost approach and evaluates three representative aircraft (narrow body, regional jet, and turboprop) for operating and passenger preference costs over a range of fuel prices. Homogenous fleets of each vehicle category are compared for operating and passenger costs over a range of fuel prices and route distances and the minimum cost fleet mix is determined. In general, as fuel prices increase, the turboprop offers a lower cost per seat over a wider range of distances when compared with both jet aircraft models. The inclusion of passenger costs along with operating costs decreases the fuel price - distance space where the turboprop exhibits the lower cost. This analysis shows that the lowest cost aircraft selection is highly sensitive to fuel prices and passenger costs, and points to the important balance between saving fuel and serving passengers. The conclusion that high fuel prices rationalize major changes in fleet composition despite higher passenger costs have implications for airlines and aircraft manufacturers when considering aircraft adoption and manufacturing strategies under future fuel price scenarios.