How Airlines Decide on the Number of Aircraft Options for an Order

The process of ordering new aircraft involves a significant amount of strategic planning and decision-making. Just like when you decide on what options to get in a new car, airlines go through a similar three-stage process to determine the number and type of aircraft to order. This article explores the key considerations and decision-making criteria that airlines use to make informed choices when placing aircraft orders.

Understanding the Initial Criteria

First Stage: Determining the Aircraft's Purpose and Specifications

The first stage of ordering a new aircraft involves defining the key operational parameters that the aircraft will need to meet. This includes several critical factors:

What routes will this plane fly? What range does it need to cover? How many passengers does it need to carry to be profitable?

These questions determine the size and type of aircraft required, as well as the engine type and other essential specifications.

Meeting Operational Needs

Second Stage: Equipping the Pilots for Safe and Efficient Flights

Once the basic requirements are established, the next step is to ensure that the pilots have the necessary equipment and tools to operate the aircraft safely and efficiently. This includes:

What are the navigation options needed for the planned routes? Which optional radios and other equipment, such as a Heads-Up Display (HUD), are essential?

This stage focuses on ensuring that the aircraft can be flown safely and effectively, considering the diverse operational needs of each route.

Satisfying Passenger Needs

Third Stage: Providing Passenger Comfort and Amenities

Finally, airlines need to consider the passenger experience. This involves deciding on:

What amenities do passengers expect and want during their flights? What level of interior design and seating types are appropriate?

This stage ensures that the aircraft meets passenger expectations and provides a comfortable travel experience.

The Management of Orders and Options

Managing Order and Option Strategies

Once the initial decision is made, airlines need to consider the long-term strategy for managing their aircraft orders and options:

How many aircraft of each type will be needed in the near future? How should total firm orders and options cover the future need? Why is it important to commit to certain aircraft types with options early on?

Airlines need to ensure that they have flexibility in their aircraft ordering strategy by discussing the price of options during initial negotiations and including purchase options for different aircraft types if they might interest them in the near future.

Conclusion

The process of ordering aircraft is complex and involves many strategic considerations. By carefully planning and making informed decisions, airlines can ensure that they have the right aircraft to meet their operational needs while also providing a comfortable and satisfactory experience for passengers.