A method implemented by a computing system that determines a prediction of degradation of components in a complex vehicle to enable cost effective maintenance and enhance vehicle availability, the method including the steps of: receiving real-time data of a current state of performance parameters of the components; and determining, by one of a physics-based model of the respective components and an empirical model of the respective components, a first residue that is a difference between the current states of the performance parameters of the components and corresponding states of the performance parameters of the components as determined by the one of the physics-based model and the empirical model; wherein the physics-based model comprises a plurality of equations that characterizes the operation of the respective components based on physics of the components and the empirical model provides a model that models normal system operation based on a statistically significant sample of operational data of the component; the method being characterized by further including the steps of: determining by a physical system model of the respective components, the physical system model being a data-driven functional model containing the expected usage parameters of the relative components pertinent to the mission profile of the aircraft and its operating modes, a second residue that is a difference between the current states of the performance parameters of the components and predetermined ranges of states of performance parameters of the corresponding components as determined by the physical system model; determining, based on a combination of the first and second residues, a level of degradation for the respective components and a rate of change of degradation for the respective components; and determining a remaining useful lifetime, RUL, of the respective components based on the level of degradation and a rate of change of degradation of the components, the RUL being a time for the respective component based on the rate of change of degradation projected for the level of degradation to equal a stored threshold level of degradation. receiving real-time data of a current state of performance parameters of the components; and determining, by one of a physics-based model of the respective components and an empirical model of the respective components, a first residue that is a difference between the current states of the performance parameters of the components and corresponding states of the performance parameters of the components as determined by the one of the physics-based model and the empirical model; wherein the physics-based model comprises a plurality of equations that characterizes the operation of the respective components based on physics of the components and the empirical model provides a model that models normal system operation based on a statistically significant sample of operational data of the component; the method being characterized by further including the steps of: determining by a physical system model of the respective components, the physical system model being a data-driven functional model containing the expected usage parameters of the relative components pertinent to the mission profile of the aircraft and its operating modes, a second residue that is a difference between the current states of the performance parameters of the components and predetermined ranges of states of performance parameters of the corresponding components as determined by the physical system model; determining, based on a combination of the first and second residues, a level of degradation for the respective components and a rate of change of degradation for the respective components; and determining a remaining useful lifetime, RUL, of the respective components based on the level of degradation and a rate of change of degradation of the components, the RUL being a time for the respective component based on the rate of change of degradation projected for the level of degradation to equal a stored threshold level of degradation. determining by a physical system model of the respective components, the physical system model being a data-driven functional model containing the expected usage parameters of the relative components pertinent to the mission profile of the aircraft and its operating modes, a second residue that is a difference between the current states of the performance parameters of the components and predetermined ranges of states of performance parameters of the corresponding components as determined by the physical system model; determining, based on a combination of the first and second residues, a level of degradation for the respective components and a rate of change of degradation for the respective components; and determining a remaining useful lifetime, RUL, of the respective components based on the level of degradation and a rate of change of degradation of the components, the RUL being a time for the respective component based on the rate of change of degradation projected for the level of degradation to equal a stored threshold level of degradation.