Maintenance costs take there toll

American Airlines's decision to retire its MD-80s comes as no surprise. With rivalries between Airbus and Boeing driving prices downwards, the relative cost of maintaining aircraft, and older aircraft in particular, is suddenly looking more expensive. Nevertheless, maintenance remains big busin...

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Bibliographic Details
Published in:Airfinance journal 1998-12 (212), p.34
Main Author: Collett, Naomi
Format: Article
Language:English
Subjects:
Aircraft
Airline industry
Airlines
Alliances
Aviation
Capital costs
Corporate profits
Engineering
International
Maintenance costs
Manycompanies
Repair & maintenance services
Stockholders
Trends
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Summary:American Airlines's decision to retire its MD-80s comes as no surprise. With rivalries between Airbus and Boeing driving prices downwards, the relative cost of maintaining aircraft, and older aircraft in particular, is suddenly looking more expensive. Nevertheless, maintenance remains big business, riding on the back of a surge in sales in the commercial aviation sector. The demand for maintenance services has also been boosted by an increase in the use of older aircraft. Deregulation has spawned startup carriers, and has resulted in as many as one airline in three outsourcing maintenance. Not surprisingly, many maintenance companies are reporting a buoyant year. Despite the global nature of the airline industry, maintenance remains a localized sector. The US is a highly segmented market traditionally with a plethora of organizations dealing with two or three products. In the rest of the world, aircraft maintenance has developed under the patronage of the government.
ISSN:0143-2257