To Add or Not to Add New Technology Aircraft

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CONNECT WITH US For more information, please contact: [email protected] | +44 20 3096 4933 visit: www.icfi.com/aviation About ICF International: ICF International (NASDAQ:ICFI) is a leading provider of professional services and technology- based solutions to government and commercial clients. ICF is fluent in the language of change, whether driven by markets, technology, or policy. Since 1969, we have combined a passion for our work with deep industry expertise to tackle our clients’ most important challenges. We partner with clients around the globe—advising, executing, innovating—to help them define and achieve success. Our more than 5,000 employees serve government and commercial clients from more than 65 offices worldwide. ICF’s website is www.icfi.com. Where do we see our best opportunities for growth balancing the needs of our customers with those of our network? Should we lease or buy? What is the right time of year to bring new aircraft in (e.g. pre-peak) to maximize revenue? Can we time aircraft checks and lease returns to minimize cost and maximize use of airframe, engine and parts lives? What is the aircraft’s residual value? Are we maximizing use of the asset before it exits the fleet? Assess timing for new aircraft Decide your financing strategy Plan for maintenance Proactively manage aircraft end of life Determine your growth plan 1. 2. 3. 4. 5. FUEL Fleet planning is not simple. The goal? Optimize the number and type of aircraft needed by an airline to meet its strategic goals. New technology aircraft add another question: When is the right time to add them to the fleet for maximum benefit from both the old and new? To strike the right balance, a strategic fleet plan is driven by network, operational, and financial strategies. Above all, fleet planning should include an organized, cross- functional team for a well-rounded view—from training to flight operations to IT (for the inevitable tsunami of available data and information from new-tech aircraft). While never simple, with the right organizational support and guidance, balancing the many drivers impacting optimal fleet composition over time does not have to be an unanswerable question or insurmountable challenge. While effectively working in a cycle, there are key steps in the fleet planning process that must be taken initially and re-considered as necessary. Flexibility is key to accommodate changing market conditions. New Technology Aircraft Improved returns Better customer experience Lower operating costs High ownership costs Big data New markets To Add or Not to Add Strategic Fleet Planning Older Aircraft Lower utilization Refurbish Heavy maintenance events Low cost of ownership High fuel burn Retirement Aircraft acquisition/ return Sale/ leaseback Maintenance events Fleet Planning Process New Technology Aircraft to a Fleet? For Fleet Planning Specialists, Complexity is Business as Usual Many drivers to consider: Network Plan Operations Plan Fleet Plan Finance Human Resources (Training, crew optimization, etc.) Engineering

Transcript of To Add or Not to Add New Technology Aircraft

Page 1: To Add or Not to Add New Technology Aircraft

CONNECT WITH US

For more information, please contact: [email protected] | +44 20 3096 4933 visit: www.icfi.com/aviation

About ICF International: ICF International (NASDAQ:ICFI) is a leading provider of professional services and technology-based solutions to government and commercial clients. ICF is fluent in the language of change, whether driven by markets, technology, or policy. Since 1969, we have combined a passion for our work with deep industry expertise to tackle our clients’ most important challenges. We partner with clients around the globe—advising, executing, innovating—to help them define and achieve success. Our more than 5,000 employees serve government and commercial clients from more than 65 offices worldwide. ICF’s website is www.icfi.com.

Where do we see our best opportunities for growth balancing the needs of our customers with those of our network?

Should we lease or buy?

What is the right time of year to bring new aircraft in (e.g. pre-peak) to maximize revenue?

Can we time aircraft checks and lease returns to minimize cost and maximize use of airframe, engine and parts lives?

What is the aircraft’s residual value? Are we maximizing use of the asset before it exits the fleet?

Assess timing for new aircraft

Decide your financing strategy

Plan for maintenance

Proactively manage aircraft end of life

Determine your growth plan

1.

2.

3.

4.

5.

FUELFleet planning is not simple. The goal? Optimize the number and type of aircraft needed by an airline to meet its strategic goals. New technology aircraft add another question: When is the right time to add them to the fleet for maximum benefit from both the old and new?

To strike the right balance, a strategic fleet plan is driven by network, operational, and financial strategies. Above all, fleet planning should include an organized, cross-functional team for a well-rounded view—from training to flight operations to IT (for the inevitable tsunami of available data and information from new-tech aircraft).

While never simple, with the right organizational support and guidance, balancing the many drivers impacting optimal fleet composition over time does not have to be an unanswerable question or insurmountable challenge.

While effectively working in a cycle, there are key steps in the fleet planning process that must be taken initially and re-considered as necessary. Flexibility is key to accommodate changing market conditions.

New Technology Aircraft ▪ Improved returns ▪ Better customer experience ▪ Lower operating costs ▪ High ownership costs ▪ Big data ▪ New markets

To Add or Not to Add

Strategic Fleet Planning

Older Aircraft ▪ Lower utilization ▪ Refurbish ▪ Heavy maintenance events ▪ Low cost of ownership ▪ High fuel burn ▪ Retirement

Aircraft acquisition/

return

Sale/ leaseback

Maintenance events

Fleet Planning Process

New Technology Aircraft to a Fleet?For Fleet Planning Specialists, Complexity is Business as Usual

Many drivers to consider:

NetworkPlan

Operations Plan

Fleet Plan

Finance

Human Resources(Training, crew optimization, etc.)

Engineering