Determining the Boeing 747 Conversion Costs for the Civil Reserve Air Fleet Enhancement Program.
AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OH SCHOOL OF SYSTEMS AND LOGISTICS
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The Civil Reserve Air Fleet CRAF Enhancement Program provides a contractual arrangement between the Air Force and major U.S. airlines for modifying Boeing 747 and DC-10 passenger aircraft for use as convertibles--aircraft capable of carrying military cargo in an emergency, while providing commercial passenger service in peacetime. The airlines will incur several costs as a result of modifying these aircraft, each of which must be reimbursed by the Air Force. The costs incurred by the airlines include net revenue lost during the eight week modification period the modification cost increased operating costs for 16 years due to the higher weight and increased value of a convertible aircraft and the opportunity cost of retaining a modified aircraft for 16 years. Each of these costs were calculated for the Boeing 747, with the following results 3,014,564 net loss of revenue during modification 14,300,000 modification cost 46,637,015 increased operating costs for 16 years and no opportunity cost. These costs total 23,951,579, and represent the amount of reimbursement from the Air Force for each Boeing 747 conversion. Author
- Civilian Aircraft
- Administration and Management
- Logistics, Military Facilities and Supplies