777-200 ER not making profit

Started by unsaid, December 19, 2009, 07:40:01 AM

unsaid

I have 15 Airbus A320-200 and 6 Boeing 777-200 ER with which I fly long distance. With Boeings, I have about 60-70% loads, and the prices are standard, I haven't increased or decreased them. They make at most 600000 USD per week profit, however, their leasing cost is always about 700000 per week. So, am I doing something wrong or is it just the way that goes?

Unbornio

You're doing something wrong I think. I've used 777s all the time, they make money. Even the older fuel-hungry 747s make tons....

You should check how many aircraft types you are using. The more types you use, the more costs each one costs to maintain. 

You can also get heavy advertisements on the route and lower the price by 10-15% to get a bit more out of it.
Beta Tester

Sigma

From which screen are you getting that "$600,000 profit" figure?

Because, if it's from the "My Aircraft" section, those figures are after Leasing costs are taken into account.  So you are making $600,000 after the leasing costs (and others) are subtracted, which sounds about right for a 777 running in the 60% LF range.

unsaid

OK, I feel stupid now, from "my aircraft" page, I just realised that figure was after the leasing costs.
Further, I have only two types of planes, A320-200 s and Boeing 777-200 ERs.

Still, I have some A320-200s that make 80% load and about 600000 USD profit after leasing costs. They do two 1-2-3-2-1 routes every day. I found out that if I keep the total mileage of 1 X 1-2-3-2-1 under 1000 miles, I could do two routes in one day with a A320-200.
Shouldn't a Boeing 777-200 ER make at least like a million bucks if a A320-200 is making 600000 USD, given that the leasing cost of the first is about 2800000 USD per month, and the latter is 800000 USD per month?

Riger

Fuel Consumption, Crew Salaries, Maintenance Costs,  etc...  all these are variables can impact different aircraft types differently.

Sigma

#5
A 777 is a very expensive plane to lease as well as operate.  And it doesn't hold a huge number of pax either.  So if it's running at just 60% full, that's not very many people paying fares to cover all those higher costs -- leasing costs are 4 times the A320s, Fuel costs are 3 times an A320, etc, etc.  Those long-range routes need to get full to make the bucks.  The short-range routes you're running with the A320s can run with a little less people because you can get an extra turn out of them that helps make up for the lower load factor.  But when you're only making 1-2 flights per day you've got to make it a full one.

Just look at your Ticket Revenue on one of your 777s versus one of your A320s.  For a plane that costs so much more to operate every week, is it really earning a huge amount more ticket revenue?  I'm gonna guess it probably isn't.  And look at its leasing and fuel costs for a week too -- they'll be hundreds and hundreds of thousands more a week than an A320.  If it isn't making enough sales to offset that cost difference it'll yield less profit than one of your A320s do.

EYguy

Hi!

An acceptable LF for a B772 or B77E would be around 70%... To get that LF, you should lower your pices of 10-15% as already suggested here AND increase Route Image (RI) with marketing campaigns. Remember also that if you fly a route once a week it will take a lot of time to get a good route image and the related acceptable LF. I would suggest you to fly routes at least 4 days a week and start a marketing campaign on that route.
And I hope that your a/cs have all the same engines: it's not the biggest expense line but it is always nice to save some money on those big a/c! ;)