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Author Topic: The BOAC Concorde Experiment (chapter two in the Concorde Experiment series)  (Read 3934 times)

Offline Mr.HP

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Profits are impressive...

Can you share with us the amount spent on acquiring the Concorde's and how long for return on investment would be @ current profits?


Albert

Isn't the amount spent on acquiring A/C closed to its value?

Assuming 1 Concorde makes 500K profit weekly, and its value is 120M, it would take ~5 year (excluding compound interest) to get investment return

This is actually very slow, as compare to about ~3 years of the B767

Offline EsquireFlyer

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Profits are impressive...

Can you share with us the amount spent on acquiring the Concorde's and how long for return on investment would be @ current profits?


Albert

Hmm, that is complicated because of Jet Age super inflation...what would be the proper way to account for inflation?
This is what I know:

For the first 40 Concorde I purchased, I received launch discount. The original price in around 1965 when I ordered these planes was about $40 million, and with 30% off, I paid about $28 million per plane. By the time the planes were delivered in 1975-1979, they were worth $100 million to $125 million. So, before even flying, they already earned about 200% to 300% return on investment. But in order to do that (1) it locked up the cash from the original investment for 10 years, and (2) also, lots of inflation happened in the meantime, so 200% is not really a full 200% it seems.

Now, earning about $400K/week, it would take 70 weeks (1.25 years) to earn back the original $28 million paid per plane. However, if you use the current value of the plane, around $125 million, it would take 6 years to earn that amount. And yet, it seems not accurate to use the $125 million number, because I only actually paid $28 million for the plane, and I got the other $97 million for "free" due to inflation. And I even got a 30% tax break due to the original plane purchase.

And also, I didn't actually lose the original purchase price for the plane, since it still counts to my CV. So it's like the plane I bought already increased my CV by 2x-3x the investment, and by flying the Concorde for 1 year, I can get back the original investment in cash form as well. Except it's in inflated dollars now.

So, yeah..it's complicated. But I gave you all the numbers I have. Based on that information, how long would you say it takes for one of the first 40 Concorde to return the investment? 1.25 years? 6 years? Something in between? Or, instant upon delivery?  ???

After the first set of 40 Concorde, my second set of Concorde cost about $53 million each at purchase time (due to loss of launch discount, and also inflation in the meantime), and during delivery time they will be worth around $125 million - $145 million each (due to even more inflation).

After that, I ordered even more Concorde (to a total of about 100 Concorde), even though at most I will only fly 35 or 42 of them probably. The rest, were just ordered for tax evasion purpose basically.
« Last Edit: May 04, 2013, 05:02:51 AM by EsquireFlyer »

Offline EsquireFlyer

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Isn't the amount spent on acquiring A/C closed to its value?

Concorde is a little different because (1) lots of inflation can happen between order and delivery, because the plane takes 10 years to launch, and (2) it is easy to get the launch discount because not many people are competing for it.

Offline EsquireFlyer

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Running 4 seven-day lines, I now have Concorde on:

London Heathrow to:
  • Bangkok (new) (x2)
  • Dubai (new)
  • Fuerteventura (new)
  • Hong Kong
  • Johannesburg
  • Kuala Lumpur
  • Lagos (new)
  • Taipei (new)
  • Tokyo (x2)
  • Montreal
  • Melbourne
  • New York (x2)
  • Osaka
  • Ottawa (new)
  • Rio de Janeiro
  • Singapore
  • Washington, D.C.

London Gatwick to:
  • Abu Dhabi
  • Bahrain
  • Dallas
  • Dubai
  • Hong Kong
  • Tokyo
  • Osaka
  • Philadelphia

Offline EsquireFlyer

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Updated financial stats after full RI growth on the 2 newer lines (and also some Jet Age inflation..).
« Last Edit: May 09, 2013, 02:24:56 AM by EsquireFlyer »

Offline EsquireFlyer

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And here are the final financial stats at endgame fuel prices ($310 / metric ton). All of the Concorde are still profitable (except the ones in maintenance), but the ones in heavy-premium configuration are making good profits ($500K+ weekly), while the ones in economy-heavy configuration are making only marginal profits (<$100K weekly).

The best-performing ones previously hit around $700K-$800K when fuel was cheaper, at around $200/ton.
Also attached is a copy of an in-game ad I made.

With the gameworld ending in less than 1 hour (real world), this concludes the BOAC Concorde Experiment.

Offline EsquireFlyer

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The final supersonic route list:

London Heathrow to:
  • Bangkok (x2)
  • Beijing
  • Dubai (x2)
  • Fuerteventura
  • Hong Kong (x2)
  • Johannesburg
  • Kuala Lumpur
  • Lagos
  • Las Palmas de Gran Canaria
  • Los Angeles
  • Montreal
  • Melbourne
  • New York (x2)
  • Newark
  • Osaka
  • Ottawa
  • Rio de Janeiro
  • Riyadh
  • Sao Paolo
  • Seoul
  • Singapore
  • Taipei (x2)
  • Tokyo (x2)
  • Washington, D.C. (x2)

London Gatwick to:
  • Abu Dhabi
  • Bahrain
  • Dallas
  • Dubai
  • Hong Kong
  • Tokyo
  • Osaka
  • Philadelphia

Manchester to:
  • Baltimore
  • Beijing
  • Lanarca
  • Newark

 

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