C Check - What should I do ?

[Ger93]

Hi,
I have a small Airline (3 A/C) 2 which are DHC 5E are due 'C' Checks in 2.1 months and 3.8 months at a cost of $250,000 approx per check, if I terminate the Lease on one of the aircraft which is due in 2.1 months the cost is $350,000, the other aircraft has a longer lease left and will cost $750,000 to terminate. I have just started to make small profits & one of my routes has built up to 90% LF - if I take the aircraft out of service for the 10 day maintenance check, how much will the CI and the LF factor drop, or should I just go ahead and pay the C check?? Closing the route & re-opening will cost also - Any suggestions would be appreciated.

Thanks,

Gerard.

[DHillMSP]

Personally, if I had the funds, I would lease an identical aircraft, move the first aircraft's schedule to it and then perform the C check on the first aircraft.  Then, repeat the move once that aircraft was out of the C check for the second.  Once you're done with maintenance, you could then fly the third aircraft (expansion!).

Otherwise, I think you'd probably take a hit on your load factor when you pull the aircraft out of service for the C check (sounds cheaper to perform maintenance than to cancel the lease).  You might be able to mitigate that a bit by starting a short-term marketing campaign for the impacted routes.

Your mileage may vary...I'm still new. 

[Ger93]

DHillMSP,
Thanks, I was thinking of leasing the extra aircraft to cover the maintaince checks, should have sufficient funds to cover the lease by then, as you say can always use the extra aircraft to expand when the checks are done!

Thanks again for the reply

Ger.

[Sigma]

This is obviously too late of a response to really help you in this particular situation, but for future reference, you take no CI hit for not operating a route during a maintenance check.  And while your LF will obviously be 0 since you're not flying that route, when a plane is down for maintenance that route is removed from the LF calculation, so you wouldn't see any impact to your overall company LF as a result.

When you're first starting out, using a plane to cover another during a C-Check is fine.  But obviously that quickly becomes cumbersome as your airline gets larger and you've got perhaps dozens of planes in C-Check at once.  Virtually every airline in the game just runs right throught their C-Checks without doing anything in particular.  Jumping out of a lease to avoid a C-Check is never a good idea.  That IS a good idea when it comes to D-Checks though.

The only thing you really need to worry about is whether you've got the cash to cover the C-Check (not having cash to do the Check and then getting caught by the authorities for not doing it can easily be a company-killing action early on as your CI takes a hefty hit) and whether you can take the 1-2 weeks of lost operating revenue.  You'll still have all the costs of the route without a penny coming in, so your profits will go down drastically if a sizeable percentage of your planes (which isn't many when you're small) are in maintenance.

[Ger93]

Thanks Sigma for the reply.