*3.3.1 Cost of ownership*

The methodology of Ploetner et al. [26] is used in this work. This approach calculates aircraft market price using aircraft parameters of range, Mach number, number of passengers, cabin volume and take-off field length based on data from year 2003 to 2008 and adjusted to year 2008 US dollars (USD). Using the relevant inflation factor [27], the costs were converted to year 2016 USD.

Given that the COO comprises of depreciation, interest and insurance, the COO development of an aircraft over time is dependent on the depreciation model chosen. In this study an exponential function model is used based on the approach of Wesseler [28]. A summary of depreciation periods of aircraft according to

**153**

*Increasing the Emission Mitigation Potential by Employing an Economically Optimised…*

Association of European Airlines 14 years 16 years Doganis 8–10 years 14–16 years IATA Average of 20 years Average of 20 years

**Literature source Narrow-body aircraft Wide-body aircraft**

literature findings is shown in **Table 5**. In summary, depreciation periods of 8–20 and 14–20 years could be used for single-aisle and twin-aisle aircraft, respectively. In ALiTiCo, aircraft delivery price is assumed to be constant over the simulation period. This is not the case in reality since aircraft prices are influenced by many factors including inflation, developments in price of materials, demand for aircraft, current market value and the strength of the dollar, among other factors [33]. However, the assumption simplifies the complexity of incorporating such effects. Furthermore, depreciation and interest period are assumed to be constant.

COC is composed of crew charges, fuel costs, direct maintenance costs (DMC),

Crew charges are based on a correlation relationship of crew salaries in 2008, supplied by EUROCONTROL [34], to maximum take-off weight (MTOW) and number of passengers on a flight. According to Wesseler [28], flight crew costs per block hour could be expressed as a function of MTOW, whereas cabin crew costs per block hour could be expressed as a function of the number of passengers. He assumed a seat density and combination of flight and senior flight attendants of a typical full-service carrier. Likewise, these costs were converted to 2016-year dol-

Fuel costs are computed from fuel consumption and the respective yearly fuel prices, adjusting to 2016-year dollars. Fuel burn per trip is still modelled using the Global Fleet Mission Calculator (GFMC) based on the BADA 3 tool of EUROCONTROL also described by Randt [23]. The tool was already validated by Ittel [35]. However, given that fuel costs cover a major share of aircraft DOC, verification of fuel consumption estimates was done for the initial fleet and nextgeneration aircraft types considered in the model. Fuel burn on routes was not modelled to increase because of payload increase. However, conservatively higher passenger and freight payload factors of 86% and 53%, respectively, than in 2008 were assumed throughout the simulation period to ensure conformity of model results to anticipated future growth in these load factors, as verified by Randt [23]. In ALiTiCo, similar to the approach of Moolchandani et al. [36], engine overhaul

or replacement is not done. Though fuel burn deterioration is mainly enginedriven, and thus does not have a linear characteristic throughout an aircraft's life, in ALiTiCo, a linear deterioration rate of 0.1% per year is assumed for simplification purposes. Considering that a deterioration of 3.5–4% is possible all through the

aircraft life [37, 38], this assumption of 0.1% per year is justified.

navigation charges, airport fees and ground handling charges.

*Summary of depreciation periods according to literature findings [29–32].*

*DOI: http://dx.doi.org/10.5772/intechopen.88219*

*3.3.2 Cash operating cost*

**Table 5.**

*3.3.2.1 Crew charges*

*3.3.2.2 Fuel costs*

lars, using the relevant inflation factors.

**Figure 3.**

*Main steps in updated integrated model environment.*

*Increasing the Emission Mitigation Potential by Employing an Economically Optimised… DOI: http://dx.doi.org/10.5772/intechopen.88219*


**Table 5.**

*Environmental Impact of Aviation and Sustainable Solutions*

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**Figure 3.**

*Main steps in updated integrated model environment.*

*3.3.1 Cost of ownership*

*Data flow in and out of GFMC, ALiTiCo and FSDM.*

**Figure 2.**

The methodology of Ploetner et al. [26] is used in this work. This approach calculates aircraft market price using aircraft parameters of range, Mach number, number of passengers, cabin volume and take-off field length based on data from year 2003 to 2008 and adjusted to year 2008 US dollars (USD). Using the relevant

Given that the COO comprises of depreciation, interest and insurance, the COO development of an aircraft over time is dependent on the depreciation model chosen. In this study an exponential function model is used based on the approach of Wesseler [28]. A summary of depreciation periods of aircraft according to

inflation factor [27], the costs were converted to year 2016 USD.

*Summary of depreciation periods according to literature findings [29–32].*

literature findings is shown in **Table 5**. In summary, depreciation periods of 8–20 and 14–20 years could be used for single-aisle and twin-aisle aircraft, respectively.

In ALiTiCo, aircraft delivery price is assumed to be constant over the simulation period. This is not the case in reality since aircraft prices are influenced by many factors including inflation, developments in price of materials, demand for aircraft, current market value and the strength of the dollar, among other factors [33]. However, the assumption simplifies the complexity of incorporating such effects. Furthermore, depreciation and interest period are assumed to be constant.

#### *3.3.2 Cash operating cost*

COC is composed of crew charges, fuel costs, direct maintenance costs (DMC), navigation charges, airport fees and ground handling charges.

#### *3.3.2.1 Crew charges*

Crew charges are based on a correlation relationship of crew salaries in 2008, supplied by EUROCONTROL [34], to maximum take-off weight (MTOW) and number of passengers on a flight. According to Wesseler [28], flight crew costs per block hour could be expressed as a function of MTOW, whereas cabin crew costs per block hour could be expressed as a function of the number of passengers. He assumed a seat density and combination of flight and senior flight attendants of a typical full-service carrier. Likewise, these costs were converted to 2016-year dollars, using the relevant inflation factors.

#### *3.3.2.2 Fuel costs*

Fuel costs are computed from fuel consumption and the respective yearly fuel prices, adjusting to 2016-year dollars. Fuel burn per trip is still modelled using the Global Fleet Mission Calculator (GFMC) based on the BADA 3 tool of EUROCONTROL also described by Randt [23]. The tool was already validated by Ittel [35]. However, given that fuel costs cover a major share of aircraft DOC, verification of fuel consumption estimates was done for the initial fleet and nextgeneration aircraft types considered in the model. Fuel burn on routes was not modelled to increase because of payload increase. However, conservatively higher passenger and freight payload factors of 86% and 53%, respectively, than in 2008 were assumed throughout the simulation period to ensure conformity of model results to anticipated future growth in these load factors, as verified by Randt [23].

In ALiTiCo, similar to the approach of Moolchandani et al. [36], engine overhaul or replacement is not done. Though fuel burn deterioration is mainly enginedriven, and thus does not have a linear characteristic throughout an aircraft's life, in ALiTiCo, a linear deterioration rate of 0.1% per year is assumed for simplification purposes. Considering that a deterioration of 3.5–4% is possible all through the aircraft life [37, 38], this assumption of 0.1% per year is justified.

### *3.3.2.3 Navigation charges*

Navigation charges are based on the EUROCONTROL model using the average unit rate weighted by the number of landings in all European countries in 2008 [28]. The charges are computed in year 2016 US dollars (USD).

#### *3.3.2.4 Airport charges*

Airport charges and ground handling charges are based on the methodology of Ploetner et al. [39]. Airport charges are composed of landing charges, passenger charges, navigation aid charges, lighting charges, terminal charges and service charges. The method was based also on data from 2008. Like other cost components, the charges are computed in year 2016 US dollars.

In the fleet model, flights could be either within a region or between two regions. For flights belonging to the latter category, the average value of airport charges within both origin and destination regions is used.

#### *3.3.2.5 Direct maintenance costs*

Using available data from Aircraft Commerce [40] for the initial fleet aircraft, the method recommended by the Association of European Airlines (AEA method) [31, 32] is adopted because it uses aircraft parameters such as aircraft operating weight empty, engine bypass ratio, etc. Other parameters such as aircraft price are obtained from the ownership cost model already explained. Furthermore, for the engine price [year 1989 USD], the approach by Jenkinson et al. [41] is used, which calculates engine price in year 1995 British pounds based on specific fuel consumption [lb/lbf/h] and cruise thrust [Ma]. The engine bare price [year 1989 USD] is then obtained after the price in year 1995 British pounds is first converted to year 1995 USD and then to year 1989 USD.

The AEA method assumed mature levels of cost, i.e. after 5–7 years of operation. Using ageing function from Strohrmann [42], based on Dixon [43], DMC values for other years of the aircraft lifetime are determined. Furthermore, input labour rate value given by the AEA in 1989 is used and converted to 2016 USD. Due to lack of data, this is assumed to be constant over time and independent of route although DMC labour rate varies over time and with world region [44]. A limitation of the AEA method is that it does not hold for engines with thrust above 30 metric tonnes. Furthermore, since the method was developed to give comparable results to aircraft operated by airlines in 1989, the method cannot be directly used for next-generation aircraft considered in this work. Therefore, improvement factors are used which correlate nonfuel COC of initial fleet aircraft to next-generation ones.

Since the AEA method for computing aircraft DMC is evaluated in year 1989 USD, an inflation factor is used to adjust the costs to year 2016 USD. Direct maintenance costs per flight cycle of representative aircraft of the initial fleet, determined using AEA method, were compared with corresponding cost values published by Aircraft Commerce (ACC). This is shown in **Figure 4**.

Cost values published by ACC can be taken as representative of the industry since they are obtained from maintenance providers.1 The difference between AEA and ACC values increased with increasing MTOW. A higher difference can be expected for aircraft with first flights made after the AEA publication. From **Figure 4**, the AEA method for DMC computation produced aircraft DMC values at most 22% higher than those of ACC. Compared to cost levels given by IATA's MCTF [45], the

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**4. Analysis**

**Figure 4.**

63% and 56%2

*Increasing the Emission Mitigation Potential by Employing an Economically Optimised…*

costs computed using AEA method are at most up to 40% higher. Therefore, for all initial fleet aircraft types used in FSDM, including aircraft with engine thrust above 30 metric tonnes like the B777-200, by applying a correction factor defined by the linear regression function in **Figure 4**, the cost results of the AEA method are

Additional direct operating costs refer to environmental airport noise and NOx charges, as well the emission trading scheme (ETS) charges [26]. The charges were computed based on functions from Ploetner et al. [39]. The noise charges are based on defined levels of aircraft noise values for arrival as well as sideline and flyover as given by the ICAO [46]. Maximum approach and sideline and flyover noise levels of 88 and 83 EPNdB, respectively, were used. Also, a constant charge of 10 Euros per

If the order of implementing the last two of the three main steps of fleet renewal presented in sub-section B of the previous section is modified, two fleet renewal strategies can be defined on an FSDM route. These are shown in **Figure 5**.

The *Growth Strategy* prioritises aircraft allocation for serving demand growth and replacing aircraft retired at the end of their design lives, before replacing those that are retired because of their operating cost disadvantage. This strategy is assumed a status quo strategy used in the airline industry. This is because aircraft manufacturers claim that more than half of aircraft deliveries forecast for the next two decades are to accommodate growth in air travel demand (ATR, 65%; Embraer,

<sup>3</sup> Values derived from ATR's turboprop market forecast 2016–2035, Embraer's market outlook 2017, Boeing

; Boeing, 57%; Airbus, 63%) rather than replace existing aircraft

This is also

adjusted to cost levels, resulting from Aircraft Commerce computation.

*DMC [\$/FH] of initial fleet aircraft, comparing AEA and ACC results.*

tonne of CO2 was implemented based on Schmidt et al. [47].

(ATR, 35%; Embraer, 37% and 44%; Boeing, 43%; Airbus, 37%).3

current market outlook 2017–2036 and Airbus Global Market Forecast 2017–2036.

<sup>2</sup> For 70–130 seat jet segment and turboprop segment, respectively.

**4.1 Longer-term fleet development strategies**

*DOI: http://dx.doi.org/10.5772/intechopen.88219*

*3.3.3 Additional direct operating costs*

<sup>1</sup> Correspondence on 13 February 2018 with Aircraft Commerce.

*Increasing the Emission Mitigation Potential by Employing an Economically Optimised… DOI: http://dx.doi.org/10.5772/intechopen.88219*

**Figure 4.** *DMC [\$/FH] of initial fleet aircraft, comparing AEA and ACC results.*

costs computed using AEA method are at most up to 40% higher. Therefore, for all initial fleet aircraft types used in FSDM, including aircraft with engine thrust above 30 metric tonnes like the B777-200, by applying a correction factor defined by the linear regression function in **Figure 4**, the cost results of the AEA method are adjusted to cost levels, resulting from Aircraft Commerce computation.
