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Author Topic: Using the airplane being purchased as the security backing the loan  (Read 342 times)

Offline George Bush

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Why can't we use the plane being purchased as the security asset to guarantee the loan? Has this ever been an option? Should it be?

Offline knobbygb

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Re: Using the airplane being purchased as the security backing the loan
« Reply #1 on: June 12, 2015, 07:17:22 AM »
It would be a little more realistic, maybe but...  If you think about it, that would mean any airline could have almost unlimited growth.  Since it's quite easy to turn a profit with pretty much any aircraft, especially at the start of the game, it would just mean that the MEGA airlines would grow even quicker than they do now and swallow up even more of the best planes.  The game would be even more biased to those who could log on and buy three planes every game-week, day and night.  (I kinda include myself in that group, and I know it's what I would do to get a competitive edge).

The current way of obtaining aircraft (which has evolved many times over the years) does at least slow things down somewhat.

Offline JumboShrimp

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Re: Using the airplane being purchased as the security backing the loan
« Reply #2 on: June 15, 2015, 11:21:39 PM »
It would be a little more realistic, maybe but...  If you think about it, that would mean any airline could have almost unlimited growth.  Since it's quite easy to turn a profit with pretty much any aircraft, especially at the start of the game, it would just mean that the MEGA airlines would grow even quicker than they do now and swallow up even more of the best planes.  The game would be even more biased to those who could log on and buy three planes every game-week, day and night.  (I kinda include myself in that group, and I know it's what I would do to get a competitive edge).

The current way of obtaining aircraft (which has evolved many times over the years) does at least slow things down somewhat.

2 reasons why it would not lead to unlimited growth (and the current system of leases with no collateral, no credit rating does):

- the real limit is aircraft delivery rate, not money.  But when money is the limit, you can get more aircraft, quicker by leasing.  (Roughly 2x as much as when buying)
- the system has a hard coded limit of $500m (depending on game date).  So even if there was a way to get faster growth by securitizing aircraft on order (which you can't, you get 1/2 the rate of growth) your growth stops at $500m, which may be 10-20 aircraft.

 

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