In January 2008, Northern Airlines merged with Southeast Airlines to create the fourth largest U.S. carrier. The new North-South Airline inherited both an aging fleet of Boeing 727-300 aircraft and Stephen Ruth. Stephen was a tough former Secretary of the Navy who stepped in as new president and chairman of the board.

Stephen's first concern in creating a financially solid company was maintenance costs. It was commonly surmised in the airline industry that maintenance costs rise with the age of the aircraft. He quickly noticed that historically there had been a significant difference in the reported B727-300 maintenance costs (from ATA Form 41s) both in the airframe and engine areas between Northern Airlines and Southeast Airlines, with Southeast having the newer fleet.

North–South Airline Data for Boeing 727-300 Jets

1. Prepare Peg Jones’s response to StephenRuth.

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NORTHERN AIRLINE DATA SOUTHEAST AIRLINE DATA ENGINE AIRFRAME COST COST PER AVERAGEC AIRFRAME COST PER ENGINE COST PER AVERAGE YEAR PER AIRCRAFTS) AIRCRAFTS) AGE (HOURS) AIRCRAFTS) AIRCRAFT(S) AGE (HOURS) 6,512 8.404 11.077 2001 2002 2003 2004 2005 2006 2007 51.80 54.92 69.70 68.90 63.72 84.73 78.74 43.49 38.58 51.48 58.72 45.47 50.26 79.60 13.29 25.15 32.18 31.78 25.34 32.78 35.56 18.86 3155 40.43 22.10 19.69 32.58 38.07 5.107 8,145 7.360 5,773 7.150 9,364 8.259 13.275 15.215 18.390