A mathematical programming model for aircraft leasing decisions

Abstract

For the airline fleet planning problem, this paper formulates a mathematical programming model specifically also taking into account of the increasingly popular capital lease, which has some mixed features of the two traditional aircraft acquirement methods: operating lease and purchase. Given the aircraft requirements, budget, and debt-ratio limit, the objective is to minimize the total cost within the planning horizon. Numerical experiments were conducted to compare the optimal solutions for the airlines with different business models, scales, and experiences. This paper further simulates a scenario under the new standards which will be applied in 2019. The results of sensitivity analysis show that when the debt-ratio constraint is relaxed, capital leases would be helpful for reducing the cost of airlines.