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Author Topic: This just doesn't make sense.  (Read 2588 times)

GMas

  • Former member
This just doesn't make sense.
« on: December 28, 2010, 03:42:13 AM »
The fuel prices are lower, the load factors are higher and my ticket prices are the same. Yet, the same planes that used to make 500,000 weekly are now make 87,000 weekly. How does that work?  :-[

GDK

  • Former member
Re: This just doesn't make sense.
« Reply #1 on: December 28, 2010, 06:11:00 AM »
Maintenance....
Inflation...

Offline Blur CEO

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  • Posts: 212
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Re: This just doesn't make sense.
« Reply #2 on: December 28, 2010, 12:33:19 PM »
Crew member salaries......
CEO bonus.........
Insurance cost.......
Monthly payment kicked in.....

Jps

  • Former member
Re: This just doesn't make sense.
« Reply #3 on: December 28, 2010, 12:45:46 PM »
I'd say it's because of the monthly lease fees. For the first 4 months, you don't pay for the aircraft lease (you paid it in advance when you ordered the plane)  and at that time the leases aren't calculated in aircraft profit. So that difference of about 400k sounds pretty reasonable for a lease fee.

GMas

  • Former member
Re: This just doesn't make sense.
« Reply #4 on: December 28, 2010, 06:56:17 PM »
My airline is 3 years old. I've had all of those planes for at least a year too.

Offline Blur CEO

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Re: This just doesn't make sense.
« Reply #5 on: December 28, 2010, 08:45:21 PM »
ya know i just got back from work and when i left work at around 3 i had about 20 mil in the bank i get home and i have 10?.........i sense a disturbance in the force....

Ilyushin

  • Former member
Re: This just doesn't make sense.
« Reply #6 on: December 28, 2010, 09:22:51 PM »
Come on guys, have a look at your income statement and you'll figure out why...

Jps

  • Former member
Re: This just doesn't make sense.
« Reply #7 on: December 28, 2010, 09:55:26 PM »
Or better yet... post the income sheet here so we don't have to keep guessing as if we were in a bingo...

GMas

  • Former member
Re: This just doesn't make sense.
« Reply #8 on: December 28, 2010, 10:57:23 PM »
I've already looked at my income sheet and can't find anything awry, but your expert help is appreciated.

Quarterly View
Income statement Q3 / 2011  Q2 / 2011  Q1 / 2011  Q4 / 2010 
  Sold tickets (economy)  0 USD  194 653 233 USD  196 020 614 USD  187 721 678 USD 
  Sold tickets (business)  0 USD  0 USD  0 USD  0 USD 
  Sold tickets (first)  0 USD  0 USD  0 USD  0 USD 
  Sold aircraft  0 USD  0 USD  0 USD  0 USD 
  Aircraft lease income  0 USD  0 USD  0 USD  0 USD 
     0 USD  194 653 233 USD  196 020 614 USD  187 721 678 USD 
  Office rent  0 USD  -14 146 633 USD  -808 048 USD  -793 844 USD 
  Fuel  0 USD  -45 198 074 USD  -47 000 503 USD  -43 350 584 USD 
  Staff salaries  0 USD  -35 465 465 USD  -30 981 726 USD  -30 645 734 USD 
  Staff training  0 USD  -2 842 142 USD  -2 823 888 USD  -2 836 047 USD 
  Marketing  0 USD  -49 275 154 USD  -15 446 074 USD  -15 287 077 USD 
  Passenger fees  0 USD  -22 709 096 USD  -22 962 325 USD  -22 073 824 USD 
  Navigation fees  0 USD  -13 341 252 USD  -11 501 904 USD  -10 863 456 USD 
  Landing fees  0 USD  -6 283 064 USD  -6 325 933 USD  -6 057 336 USD 
  Ground handling  0 USD  -14 093 506 USD  -14 190 860 USD  -13 619 679 USD 
  Aircraft maintenance  0 USD  -9 686 686 USD  -9 626 726 USD  -10 736 754 USD 
  Aircraft insurance  0 USD  -4 198 200 USD  -4 281 704 USD  -4 340 763 USD 
  Aircraft leases  0 USD  -23 894 899 USD  -24 940 115 USD  -24 043 272 USD 
  Purchased aircraft  0 USD  0 USD  0 USD  0 USD 
  Alliance fees  0 USD  -1 965 326 USD  -1 961 230 USD  -1 864 118 USD 
  Fines  0 USD  0 USD  0 USD  0 USD 
     0 USD  -243 099 497 USD  -192 851 036 USD  -186 512 488 USD 
  Loan payments  0 USD  -123 477 USD  -196 060 USD  -190 504 USD 
  Bank fees  0 USD  -8 000 USD  -13 000 USD  -13 000 USD 
  Interest  0 USD  -35 443 USD  -34 931 USD  -50 107 USD 
  Income tax withheld (30%)  0 USD  0 USD  -811 682 USD  0 USD 
Result  0 USD  -166 920 USD  -1 055 673 USD  -253 611 USD 
  Result  0 USD  -48 613 184 USD  2 113 905 USD  955 579 USD 

Offline JumboShrimp

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Re: This just doesn't make sense.
« Reply #9 on: December 28, 2010, 11:24:49 PM »
  Marketing  0 USD  -49 275 154 USD  -15 446 074 USD  -15 287 077 USD 

Your marketing went up $34 million.

Offline Sigma

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Re: This just doesn't make sense.
« Reply #10 on: December 28, 2010, 11:41:29 PM »
Your Marketing expense certainly affects your overall health of the company but wouldn't be reflected on a singular aircraft's figures, since that's an overhead expense.

Are your plane's still reporting the same low figures compared to before?  It's normal that every 4th week for a plane to report very low income when it goes in for its B-Check -- a day without any income will do just about what you describe to your profits.  But of course that wouldn't continue on for successive weeks.

Offline Blur CEO

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Re: This just doesn't make sense.
« Reply #11 on: December 29, 2010, 01:08:50 AM »
yeah marketing did the something to me.

Offline Sanabas

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Re: This just doesn't make sense.
« Reply #12 on: December 29, 2010, 01:12:54 AM »
Your marketing went up $34 million.

And office rent went from ~800k to over 14 million. New base or something?

GMas

  • Former member
Re: This just doesn't make sense.
« Reply #13 on: December 29, 2010, 02:38:18 AM »
Yep, well sort-of. I opened a new base, but it was very unsuccessful, so I promptly closed it, which is always hard financially. Then, I fired the extra staff (some departments had more than 210% of what they required), but, as I expected, that decreased my CI a lot, so then I scheduled a ton of marketing to make up for it. I'm not too concerned about any of that, I know where that money went, what I don"t understand is why the planes that were making upwards of $500,000 are now only making about 87,000 even though nothing seems to have changed except for the fuel cost, which has decreased and the LFs, which have increased. The profits have only increased a slight bit, which I believe is do to resetting all fares to default. Thanks  :)
« Last Edit: December 29, 2010, 02:44:58 AM by GMas »

Offline Sanabas

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Re: This just doesn't make sense.
« Reply #14 on: December 29, 2010, 04:44:22 AM »
Take out those two big increases, and your balance sheet looks the same this month as the last two, i.e. a pre-tax profit margin of about 1% of ticket sales, with another 1% of ticket sales going to alliance fees. That seems like an airline on the brink of going out of business even before the big increase to marketing and the 14 million dollar hit from the failed base.

GMas

  • Former member
Re: This just doesn't make sense.
« Reply #15 on: December 29, 2010, 01:49:36 PM »
Take out those two big increases, and your balance sheet looks the same this month as the last two, i.e. a pre-tax profit margin of about 1% of ticket sales, with another 1% of ticket sales going to alliance fees. That seems like an airline on the brink of going out of business even before the big increase to marketing and the 14 million dollar hit from the failed base.

That's because this all happened in the last to months, at least, I think so. A few months ago, my airline was making about 2 million weekly. Anyways, my question is not my total income, I understand that, even if it is not great, my question is about why my aircraft that my airline has had for at least a year (there are several airplanes that this has happened to all at once and that is why my airline is hurting. It probably could have easily survived all of the other misfortunes.) suddenly dropped from a profit of 500,000+ a week to 87,000 a week when the fuel prices are lower, the load factors are higher and my ticket prices are the same and it doesn't appear to just be maintenance because the profits have not gone back up any meaningful amount.

GDK

  • Former member
Re: This just doesn't make sense.
« Reply #16 on: December 29, 2010, 02:28:18 PM »
Show the estimated weekly financial overview of your aircraft.

GMas

  • Former member
Re: This just doesn't make sense.
« Reply #17 on: December 30, 2010, 04:27:32 AM »
Here's the one I'm most confused by-

The sums are an estimate of next week's incomes based on previous day.
Sold tickets   606 215 USD
Line maintenance (A+B)   -12 110 USD
Insurance   -18 413 USD
Fuel cost   -222 036 USD
Route fees (1)   -173 913 USD
Weekly leasing cost   -97 603 USD
Total   82 140 USD

Offline ArcherII

  • Members
  • Posts: 1935
Re: This just doesn't make sense.
« Reply #18 on: December 30, 2010, 05:53:47 AM »
Here's the one I'm most confused by-

The sums are an estimate of next week's incomes based on previous day.
Sold tickets   606 215 USD
Line maintenance (A+B)   -12 110 USD
Insurance   -18 413 USD
Fuel cost   -222 036 USD
Route fees (1)   -173 913 USD
Weekly leasing cost   -97 603 USD
Total   82 140 USD

You have that figure that is projected for that airplane. But it is not taking account the fixed costs as personnel costs, commonality costs, office rent, ground handling, insurance etc etc. So that number is reduced even further to maybe negative figures, and that's what it is shown in your income statement.

GDK

  • Former member
Re: This just doesn't make sense.
« Reply #19 on: December 30, 2010, 08:45:06 AM »
You have that figure that is projected for that airplane. But it is not taking account the fixed costs as personnel costs, commonality costs, office rent, ground handling, insurance etc etc. So that number is reduced even further to maybe negative figures, and that's what it is shown in your income statement.

I guess he is saying this (82 140 USD) used to be 500 000 USD. So lets see from here where is the root cause.

 

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