I tried to lay out how looking at DOC's or COC's or looking at costs per flight or per seat influences such a comparison in an earlier post.
Let's have another look at it. DOC or Direct Operating Costs are comprised of
- Fuel Costs
- Flight Crew Costs
- Cabin Crew Costs
- Landing Fees
- Maintenance Costs for the Aircraft
- Maintenance Costs for the Engine
I concentrated on the North American Environment and found $4.40 per 1,000lbs landing weight to be a fair value. The Max Landing Weight (MLW) I took from the information provided by Airbus and Boeing for the respective highest weight variants.
I found pilot and 1st officer wages here. I took the average from Southwest and Jetblue and came out with $305.50 for both per hour. For the flightcrew I got information here and picked $50/hour for my calculation. I calculated with one flight attendant per 50 seats.
The most difficult part is the maintenance cost evaluation. I found some valuable information here and here and decided to take $600 per flight hour for aircraft maintenance and $300 per flight hour for engine maintenance into the calculation, regardless of the engine involved (and I know that some readers might cry "foul" here, but at least the CFM56-5B and -7B should not be that far apart).
If you sum all these cost elements up and calculate the fuel burn (I used well calibrated models for the A320 and B737-800), you have a comparison of the DOC per trip. Divide it by the number of seats and you have the DOC per seat (and trip). I took the numbers that Boeing uses (150 for the A320 and 162 for the B737-800).
I did calculations for a 500nm mission and a 800nm mission. Boeing likes to present their numbers based on the shorter, Airbus favors the longer mission.
Fuel burn for the A320 was found to be between 0.4% (500nm) and 1.6% (800nm) lower than for the B737-800. on a per sear basis that means the Boeing aircraft is more efficient by between 7.1% (500nm) and 5.9% (800nm). A fuel price of $3/gallon was assumed for this analysis.
- The B737-800 has between 2.6% (500nm) and 3.3% (800nm) higher trip costs than the A320.
- The B737-800 has between 5% (500nm) and 4.4% (800nm) lower seat costs compared to the A320.
The current list price for the A320ceo is $88.3million, the B737-800 sells for $84.8million at list.
This translates into a monthly leasing rate of $706.400 for the A320 and $678.400 for the B737-800.
Assuming around 3.000 operating hours a year the aircraft can operate we get lease cost per trip between
- $4.238 - $6.216 for the A320
- $4.070 - $5.970 for the B737-800
This leads to a DOC/trip cost advantage of roughly 0.15% for the
- B737-800 for the 500nm mission
- A320 for the 800nm mission
- 7.6% for the 500nm mission
- 7.25% for the 800nm mission
This little analysis shows how unimportant a few percentage of fuel burn are even in a high fuel cost environment. The higher capacity of the B737-800 can result in more revenue and profit when you are able to fill the additional seats. If your load factor is in the 80% range with a A320, you are probably better off with the slightly smaller aircraft.
UPDATE: Scott Hamilton was so kind to provide "real-life" monthly lease rates for the A320 ($325,000) and the B737-800 ($385,000). I used the list prices as I had no better source. Counting in these lease rates, based on discounted list prices, the picture somewhat changes:
It leads to a DOC/trip cost advantage for the A320 between
- 6.5% for the 500nm mission and
- 7.2% for the 800nm mission
- 1.4% for the 500nm mission
- 0.7% for the 800nm mission
Another example of this "business model" (low capital costs coupled with higher fuel costs) is Allegiant. They are buying their MD-80 for $2-$3 million a piece - leasing a B737.-800 would cost them about $4.62 million a year with a monthly rate of $385,000! Say Allegiant financed the $3m buy of an MD-80 with an 8% loan, so they have to pay $20,000 in interests each month - still they are saving $365,000 over the B737-800.
I remember American Airlines stated that a B737-800 burn about 30% less fuel than a MD-80. For an 800nm trip I get fuel costs for the MD-80 that are $1,404 higher than for the B737-800. Theoretically you could fly 260 each month for the saved $365,000 before you have the same costs for fuel + financing. Of course the maintenance costs for a 20+year old MD-80 are way higher than for a brand new B737, so this is only one side of the medal - but it shows why different airlines can make money with different business models.