Originally Posted by
arbalist1
Yes there is a fixed cost of having an additional parts inventory. But as revenue amounts increase, the relative cost of those fixed costs decrease. The opportunity cost of sitting around and waiting for Boeing to deliver an airplane six years late may, in fact, exceed the cost of buying a few more replacement parts.
But it's more than that too... training costs, mx costs, training the mx, computer programming costs, logistics, re-training gate staff, etc. Embrarer puts out a great product but one reason Soutwest has been as profitable in the past is because they run a single type. But it's a double edged sword as everyone knows.