Abstract:

Acquiring an aircraft requires a huge investment made by an airline. There are several acquisition methods which could be chosen by airlines, including direct purchase to manufacturer, capital or financial lease, and operating lease. Selection of these aircraft acquisition methods in composing their fleet will determine an airline’s financial performance, since fleet cost is considered as one of airlines’ largest cost aside from fuel. Therefore, it is of high importance for airlines to choose the most efficient aircraft acquisition method which could minimize their unit cost while obtain the maximum revenue. This paper is thus aiming to measure and compare the efficiency of 34 worldwide airlines over the period of the last five years (2013-2017) from fleet acquisition method perspective, through the use of Data Envelopment Analysis (DEA). Four input variables (number of fleets, size of leased fleets, aircraft rental cost, and other operating costs) and two output variables which includes Revenue Passenger Kilometers (RPK) and Revenue per Available Seat Kilometer (RASK) are presented in the analysis. The result obtained from the research shows that the most efficient acquisition option differ depending on its business model.