New-model commercial airplanes are much more fuel-efficient than older models. How is it possible for airlines flying older models to make money when its competitors are flying newer planes.
This could be explained by depreciation. Airlines flying older models are likely paying fewer taxes on depreciation. It's possible the older models might even be fully depreciated at this point, in which case the airlines wouldn't be paying any taxes on depreciation. The tax reduction improves the airlines cash flows, allowing it to remain competitive against airlines with new models. New models might have lower operating costs due to fuel-efficiency, but this could be initially offset by the tax on depreciation.
1. What are the top 3 costs besides depreciation by airlines do you think and do you think all of these would be better (lower) with newer airplanes?
The top 3 costs would be installment payments on leases/purchases of planes, fuel and maintenance and lastly amount of ...
An expert examines the three major expenses airlines face and explains why some are less expensive for airlines with newer fleets and why some are in fact likely more expensive.