Constant Dollar Accounting

The economic model presented in this paper uses f«>ur deflators to include the effect of inflation

on cost:

1. The SIC 3721 deflator О ^ for the airframes industry.

2. The SIC 3724 deflator Df is used for engines and engine parts

3. The Consumer Price index will be used to deflate labor costs. This is by no means an ac­tuate deflator for all labor involved Maintenance workers, pilots and the “average" Ameri­can all have different deflators, but the CPI is a reasonable deflator for all these professions.

4. The fuel pnee deflator Df

The definition of a deflator is:

^ _ Price for year=X

D><«’**- Price in 1994 Ш

These deflators arc often revised and reliable data is often five years old. they can be found in "Aerospace Facts and Figures" [27) Note: All deflators are defined as 1 for 1994.

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