Aviation Finance, Airline Fleet Planning & ACMI Wet-Lease Operations
Aircraft ACMI Wet-Lease MGBH Floor & PBH Reserve Formula
Calculate Airline ACMI (Aircraft, Crew, Maintenance, Insurance) Wet-Lease Billable Block Hours with Minimum Guaranteed Block Hours (MGBH) Floor, Monthly ACMI Invoice ($), Power-by-the-Hour (PBH) Engine Overhaul Reserve, and Effective Cost Per Flown Seat-Hour.
Separate MGBH take-or-pay billing floors from actual flown Power-by-the-Hour engine reserves!
Airlines adding seasonal holiday capacity sign ACMI Wet Leases (Aircraft, Crew, Maintenance, and Insurance) governed by a monthly Minimum Guaranteed Block Hours (MGBH) floor: the lessee airline pays Billable_Hours = MAX(MGBH_Floor, Actual_Flown_Hours) * ACMI_Hourly_Rate even if schedule cancellations leave the jet parked! Conversely, lessor Power-by-the-Hour (PBH) engine shop-visit reserves accrue strictly on Actual_Flown_Hours * PBH_Reserve_Rate! Dividing the MGBH-floored invoice by (Actual_Flown_Hours * Seats) exposes how off-peak under-utilization inflates Effective ACMI Cost Per Flown Seat-Hour!
Verify on a Narrowbody Summer Wet Lease—MGBH_Monthly_Floor = 300.00 block hr (B2), Actual_Flown_Hours = 340.00 block hr (B3 -> Billable Block Hours = MAX(300, 340) = 340.00 hr in E2), ACMI_Block_Rate = $4,500/hr (B4 -> Monthly ACMI Invoice = 340 * 4,500 = $1,530,000 in E3), Lessor_PBH_Engine_Reserve = $650/flown hr (B5 -> PBH Accrual = 340 * 650 = $221,000 in E4), and Seat_Capacity = 180 seats (B6): Effective ACMI Cost Per Flown Seat-Hour is 1,530,000 / (340 * 180) = $25.00/seat-hr (E5)!
| ACMI Wet-Lease Metric (300 MGBH, 340 Flown Hr, $4,500/hr, $650 PBH, 180 Seats) | Formula | Verified Output |
|---|---|---|
| Billable Block Hours (hr) | MAX(MGBH_Floor_Hr, Actual_Flown_Hr) | 340 hr (300 hr @ 250 Flown) |
| Monthly ACMI Invoice ($) | Billable_Block_Hr * ACMI_Rate_Hr | $1,530,000 ($1,350,000 @ 250 Flown) |
| PBH Engine Reserve Accrual ($) | Actual_Flown_Hr * PBH_Reserve_Hr | $221,000 ($162,500 @ 250 Flown) |
| Effective ACMI / Flown Seat-Hr ($) | Monthly_Invoice / (Actual_Flown * Seats) | $25.00 ($30.00 @ 250 Flown) |
ACMI MGBH Invoice & Effective Cost Per Flown Seat-Hour Formula
Validate MGBH > 0, Actual_Flown_Hours > 0, ACMI_Rate > 0, PBH_Reserve >= 0, and Seat_Count > 0!
=LET(mg_h, B2, fl_h, B3, rt_h, B4, pb_h, B5, st_n, B6, IF(OR(mg_h <= 0, fl_h <= 0, rt_h <= 0, pb_h < 0, st_n <= 0), "Invalid ACMI Wet Lease", LET(bl_h, MAX(mg_h, fl_h), inv_d, bl_h * rt_h, ROUND(inv_d / (fl_h * st_n), 2))))Shoulder-Season Under-Utilization Penalty Check (Set Actual Flown = 250 hr)
Drop Actual_Flown_Hours B3 from 340 hr to 250 hr (50 hr below the 300 hr MGBH floor): Billable Hours E2 floors at 300 hr ($1,350,000 invoice in E3), pushing Effective Cost Per Flown Seat-Hour E5 up 20% from $25.00 to $30.00/seat-hr while PBH accrual E4 drops proportionally to $162,500!
=IF(ISTEXT(E2), E2, ROUND(B3 * B5, 2))Try the example
Use the original values or change them to test your understanding.