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than the list price due to discounting. The impacts on an airline’s financial position of such an investment include depreciation costs that typically are incurred for 10 - 15 years, as well as increases in long-term debt and associated interest expenses. From an operational perspective, the decision to acquire a specific aircraft type can have an even longer impact, as some commercial aircraft have been operated economically for more than 30 years. For example, early versions of the ?McDonnell Douglas DC-9 were introduced in the late 1960s and are today still operated (with proper maintenance and refurbishment) by many airlines around the world. It is therefore somewhat surprising that the decision support tools used to make these very important long-term decisions are not as sophisticated as one would expect (or as sophisticated as some of the tools available to airlines for more tactical decisions like scheduling and revenue management). The highly uncertain nature of conditions 10 - 20 years into the future has limited the development and use of detailed optimization models for airline fleet planning. Instead, most airlines rely primarily on (relatively sophisticated) spreadsheet-based financial models to make fleet planning decisions. Section 6.1.1 first summarizes the many different issues faced by an airline in making fleet planning decisions. The most important characteristics of different aircraft types are introduced, and the various selection criteria that affect airlines’ ultimate choice of aircraft types are discussed. In Section 6.1.2, the role of fleet planning in the overall airline planning process is then discussed in greater detail, and a framework for evaluating the economic and financial impacts of alternative fleet acquisition options is described. Two theoretical approaches for assessing the impacts of different fleet acquisition strategies are then compared - “top-down” as opposed to “bottom-up” fleet planning. 6.1.1 Airline Fleet Decisions The fleet planning problem facing an airline is in fact an optimal staging problem. An airline’s fleet composition is defined for a particular point in time, but it changes with every additional aircraft acquired and every existing aircraft that is removed from the fleet. An airline’s fleet plan should therefore reflect a strategy for multiple periods into the future, including the number of aircraft required by aircraft type, the timing of future deliveries and retirement of existing fleet


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