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Author Topic: When is it a good time?  (Read 973 times)

SirGrant

  • Former member
When is it a good time?
« on: February 04, 2010, 02:31:58 AM »
I haven't been playing for long, i think i got the hang of it as my profits are steadily increasing and all looks well.

I know this is a "how long is a piece of string" question... BUT... from your experience, when or what things should i look at to see when i can expand with an extra aircraft successfully. 


I have 2x 737's, 1x 757.  company and route image is rising nicely and hence passengers are increasing as well.

I feel i have a good positive cash flow.

Any tips or advice on when to expand as i don't want to do it prematurely. 

cheers,
Grant.

Offline schro

  • Members
  • Posts: 4465
Re: When is it a good time?
« Reply #1 on: February 04, 2010, 03:58:43 AM »
I'd keep piling on more planes and routes as you can cash flow them.

Be wary about adding too many fleet types - that 757 will cost you an extra 200-300k per month in overhead above and beyond if it was a 737 classic.

SirGrant

  • Former member
Re: When is it a good time?
« Reply #2 on: February 04, 2010, 04:26:12 AM »
thanks schro.. i know what you mean, luckily it is only a 1 yr lease, once lease is up, it will be replacing the B757 with another 737 class and the maintainence costs should come down alot.

A quick lesson i learned after leasing the aircraft  :-\

We i'm trying a 3600nm intl longhaul which i am the only one doing this route, and it has a tiny bit higher demand for customers than i can carry which leads into a quick question.....   Is it better to be just under the demand, or over the demand?   ???

Cheers,
Grant.

Offline schro

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  • Posts: 4465
Re: When is it a good time?
« Reply #3 on: February 04, 2010, 05:49:17 AM »
I tend to aim for just under demand, though, I am fairly new here as well.

knutm1980

  • Former member
Re: When is it a good time?
« Reply #4 on: February 05, 2010, 03:22:47 PM »
thanks schro.. i know what you mean, luckily it is only a 1 yr lease, once lease is up, it will be replacing the B757 with another 737 class and the maintainence costs should come down alot.

A quick lesson i learned after leasing the aircraft  :-\

We i'm trying a 3600nm intl longhaul which i am the only one doing this route, and it has a tiny bit higher demand for customers than i can carry which leads into a quick question.....   Is it better to be just under the demand, or over the demand?   ???

Cheers,
Grant.

World events can impact pasenge numbers, so be sure to check regularly so you're not missig out on valuable custom. Also keep an eye out for competition on your routes, both appearing and disappearing. I've noticed some routes loosing competition, the key is to be quick to plug the hole.

Yb

  • Former member
Re: When is it a good time?
« Reply #5 on: February 06, 2010, 12:42:48 AM »
I'd keep piling on more planes and routes as you can cash flow them.

Be wary about adding too many fleet types - that 757 will cost you an extra 200-300k per month in overhead above and beyond if it was a 737 classic.

Actually that is not true. There is no difference if you have 1 or 2 fleets. It is the third and fourth (and so on) that adds the overhead costs.

Offline schro

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  • Posts: 4465
Re: When is it a good time?
« Reply #6 on: February 06, 2010, 03:46:35 AM »
Actually that is not true. There is no difference if you have 1 or 2 fleets. It is the third and fourth (and so on) that adds the overhead costs.

The costs don't go exponential on you until the 3rd/4th type, however, you will always  spend more money on overhead if you have 2 fleet types rather than one.

Suppose two scenarios, in both cases you have two planes:

1. You have a 737 and 757. You pay ~200k each for overhead/training and ~100k each for engine maint (total 600k/month).
2. You have 2 737s.  You pay ~225k for overhead/training and ~115k for engine maint (total 340k/month).

Yb

  • Former member
Re: When is it a good time?
« Reply #7 on: February 06, 2010, 03:06:26 PM »
The costs don't go exponential on you until the 3rd/4th type, however, you will always  spend more money on overhead if you have 2 fleet types rather than one.

Suppose two scenarios, in both cases you have two planes:

1. You have a 737 and 757. You pay ~200k each for overhead/training and ~100k each for engine maint (total 600k/month).
2. You have 2 737s.  You pay ~225k for overhead/training and ~115k for engine maint (total 340k/month).

Didnt know that. But anyways I think that is still a good bargain to have 737 and 757 Than just one type. Even more if A32X and ATR42/72 fleet. The third type I used just once and that was short haul - medium haul - intercontinental and then it worked out after having 50/40/10 of planes

Offline schro

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Re: When is it a good time?
« Reply #8 on: February 06, 2010, 05:43:32 PM »
Didnt know that. But anyways I think that is still a good bargain to have 737 and 757 Than just one type. Even more if A32X and ATR42/72 fleet. The third type I used just once and that was short haul - medium haul - intercontinental and then it worked out after having 50/40/10 of planes

I agree having a fleet mix to cover the different needs of an airline is necessary and vital to success, I just think its an unnecessary drag during the startup of an airline - maxing out what you can do with one fleet type before moving to the next will help keep the overhead costs down.

Of course, when fuel isn't that expensive, it really only impacts how profitable you are... but when fuel is at $1300+, it will be what makes or breaks you as an airline.

 

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