How to structure this contract
- Split equipment from parts. New-build aircraft and spare parts are different products with different costs behind them.
- Index new-build equipment. Use the BLS Aircraft Manufacturing PPI, PCU336411336411.
- Build the equipment composite. Weight airframe metals, engines, avionics, labor, and freight.
- Build the parts composite separately. Spares have no matching index: price from a separate weighted composite, never against the aircraft-manufacturing index.
Use two formulas, not one
New aircraft and spare parts are different products with different costs behind them. One formula covering both will misprice at least one side. Split the contract into two parts: equipment (complete aircraft) and parts (spares, subsystems, maintenance).
Equipment: complete aircraft
Index new-build aircraft against the BLS Aircraft Manufacturing PPI, series PCU336411336411.
This series covers civilian and military aircraft combined. It is not a commercial-only number. Do not describe it that way in a contract, and check bls.gov/ppi for a civilian-specific sub-series if that distinction matters to the deal.
Build the cost composite from these starting weights, then adjust to the actual bill of materials:
| Component | Benchmark | Starting weight |
|---|---|---|
| Airframe aluminum and titanium | WPU102501 (Aluminum Mill Shapes) blended with PCU331491331491 (titanium and other nonferrous) | 25% |
| Jet engines | PCU336412336412 | 25% |
| Avionics and electronics | PCU334511334511 (navigation/guidance systems, closest proxy) | 15% |
| Skilled assembly labor | Regional aerospace manufacturing wage index | 25% |
| Freight and utilities | Freight and energy composite | 10% |
Parts: spares and subsystems
No government index tracks aircraft spare parts. That is not a gap in the data. Spares pricing follows aftermarket margins and small-batch production runs, a different market from new-aircraft manufacturing that a manufacturing-output index was never built to capture. Price this side entirely from the input composite.
| Component | Benchmark | Starting weight |
|---|---|---|
| Engine parts and assemblies | PCU336412336412 | 30% |
| Avionics, wiring, and control panels | PCU334511334511 (proxy) | 25% |
| Fasteners and structural hardware | PCU332722332722 | 20% |
| Maintenance and repair labor | Regional aerospace MRO wage index | 15% |
| Logistics and delivery | Freight or air cargo index | 10% |
Engine parts carry the largest weight because engine overhaul is where most aftermarket spend concentrates.
Worked example
A $200,000 spares scope, weighted per the table above, rises 6% over a review period. The adjustment is $12,000, not a flat guess: each component moves by its own index, and the weighted total is what the clause pays.
Don't cross the two markets
Never benchmark spare parts against the aircraft manufacturing index, PCU336411336411 or otherwise. New aircraft and spares behave differently. A shared index drifts away from what either side actually pays within a few review cycles.
Live index data
- US PPI: Aircraft Engine and Engine Parts Manufacturing: current value, year-over-year change, and a free calculator
- US PPI: Aircraft Manufacturing: current value, year-over-year change, and a free calculator
- US PPI: Metal Bolt, Nut, Screw, Rivet, and Washer Manufacturing: current value, year-over-year change, and a free calculator