Fleet Replacement Analysis

Fleet Replacement Analysis Enter data into the Excel template. As you will see, this decision is critically dependent on your projection for future fuel costs and the discount rate employed. Run a few “sensitivity” analyses with varying fuel and discount rates to see how the fleet replacement decision changes. Remember that the net present value obtained is a total cost of operation. The spreadsheet computes the cost per available seat mile (CASM). The aircraft with the lowest net present value CASM is the best financial choice. Prepare a memorandum (not more than 2 pages not including appendices) to Mr. Kluyver summarizing your analysis and making a recommendation. Remember that executive management will need to understand how the analysis was conducted. Explain your assumptions and methodology concisely. Insert (copy and paste) and reference Excel worksheets as appendices to support your fleet replacement recommendation. Use other tables and graphs as appropriate to support your recommendation.