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Author Topic: profit or loss??  (Read 1342 times)

Offline KoningBoer

  • Members
  • Posts: 153
profit or loss??
« on: June 28, 2009, 10:49:59 PM »

For some reason I dont seem to be able to earn a profit on my B777-200ER, but let me first explain why i dont get this right.

The aircraft is assigned to the route EHAM-SAEZ, flies 5 return flights in a week, configured y=196,c=15,f=4 all premium seats.
When i check the route profits from the route management view, it shows average profits between 60K and 100K, loadfactor over all week average is
about 92%, but still it says to be making losses of around 250K a week. I operate about 17 jets, and this is the only one making losses, as shown in the 'my aircraft' view.

I have two triple sevens in my fleet, the one just mentioned, and a newer 300 series. If i compare the weekly estimation given in the aircraft view between those two,
the estimate is minus 320K and minus 180K respectively. But the confusing part is that the latter show me a revenue of about 1M per week, and the former minus 250K.
Then i looked at, in the aircraft view, the numbers stated about the profit of the last day, and the 200ER is always negative -40K, the 300 however is always positive +90K.
Although the 300 series is flying a bit shorter route EHAM-WMKK, and has a lower fuel burn ratio, the loadfactor is about the same. Financial differences in favor of the 200ER is a lower leasing price.
In summary, the 300 has about 40 more seats, higher leasing fees, and some shorter legs to fly, but i dont get how this difference in revenue/profit can be so big?

What am i missing, doing wrong or not understanding, in this situation??


elitemedia

  • Former member
Re: profit or loss??
« Reply #1 on: June 29, 2009, 07:11:07 AM »
For me the main problem with your aircraft is the number of seats..... 210 pay its way too little for that kind of aircraft....

Talentz

  • Former member
Re: profit or loss??
« Reply #2 on: June 29, 2009, 10:14:35 AM »
Further, I would like to add:


Competition on those two routes. On the EZE route, everyday there is competition to fight. On the KUL routing. Somedays you have competition and some you dont. On the days you dont, I would assume a full aircraft = more revenue. I can understand why the 773 loses less money, overall.

With the 772E, everyday you face competition. Thus, hurting your yields. You say avg LF is 92%. Which is high, true. But it doesnt mean much when you look behind the numbers. You can fly 100% LF on a 100 seat 777 and lose money..

Which I suspect is the case here. As Eliteness mentioned. You have too few seats for your 772E (By comparison, my 772Es fly w/ 310 seating. My 767-200s fly w/ 215 seating..) So your flying an aircraft with a monthly lease in the 2.5M a month range, with 1/3 less then standard seating. All this while fighting on a route with competition. I would also venture out and say to get an avg 92% LF, your prices are probably 10% discount or more.. But that's just my guess.

All in all, your not pulling in enough money to pay the 772Es lease + fuel.. (not to mention labor and fleet common)


If your wondering still why the 773 pulls in more money.. its simple. 2 of the days you fly to KUL theres no competition to contend with. which you get an auto full aircraft = max revenue for that flight.. thus, the 773 "makes" more money then the 772E.. but both still operate a loss at week end.


Does that help?


Talentz

Offline KoningBoer

  • Members
  • Posts: 153
Re: profit or loss??
« Reply #3 on: June 29, 2009, 11:49:45 AM »

First of all thaks for ur kind advice.

Ok, i think the problem probably lies in a mediocre seating capacity, and higher fuel expenses. But if i look at the profits in the route management view, it does include route fees, fuel expenses, handling and other costs, and then show me a profit of 60-100K per leg. So then if i multiply this by factor 2, both way legs, the profit for a week should be 80*2*7=1,1M roughly. If i multiply the weekly revenue by 4 to arrive at a monthly income of 4,5 milion. Then we have the costs of maintenance, lease cost, and personel, which accumulate to 2,5+(0,5*1,1)+ 0,08 is roughly 3,1 milion in cost a month. So, unless im just another retard, that should yield a profit of 1,4 mil a month. right??

 

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