A Methodological Framework for Financial Feasibility and Stochastic Modeling of Performance-Based Logistics (PBL) in Aviation

This study investigates the financial feasibility and operational implications of Performance-Based Logistics (PBL) contracts within the aerospace industry, addressing the critical gap between theoretical frameworks and practical financial modelling. Unlike traditional transactional "pay-per-part" models, PBL aligns service provider incentives with system availability and long-term reliability.This research provides a robust methodological framework for analyzing PBL contracts, incorporating a stochastic spare parts calculation using the Poisson Distribution and a comprehensive five-year financial projection for a complex aircraft avionics suite. By critically evaluating the strategic trade-offs between front-loaded R&D investments and the subsequent breakeven point, the study demonstrates how targeted interventions in high-impact failure nodes can optimize both provider profitability and fleet readiness. The findings reveal that the "Learning Curve" effect and the systematic reduction of failure rates are structural necessities for achieving mutual gains. This research moves beyond descriptive analysis to offer a practical, data-driven guide for calculating the financial and operational sustainability of PBL applications in high-reliability aviation systems.