An adaptive aero-thermodynamic engine model is disclosed which incorporates a plurality of model engine operating parameters, a plurality of nominal component efficiencies and corresponding efficiency modifier functions. The engine model is adapted by measuring a plurality of engine operating parameters corresponding to the plurality of model engine operating parameters during steady state operation of the engine over a plurality of data points, matching each of the model engine operating parameters to respective measured engine operating parameters by iteratively adapting each of the nominal component efficiencies using the corresponding efficiency modifier functions, estimating actual component efficiencies based upon the adapted nominal component efficiencies, and inputting the estimated actual component efficiencies into the engine model.