Hi there, this may be a dumb question but i still wanted to ask you.
Is it possible to run a profitable leasing company in this game or is that just impossible since the little amount you get for leasing...
And I mean especially in this game there is currently a lot of demand for used jet planes to lease, but they are not available. IS it profitable to buy jet aircraft and lease them against a quite high price since there is a high demand?
I asked myself the same question and try it out since 1 1/2 gameyears in Dawn of the Millenium.
I had a big profitable airline with approx. 200 aircraft, half of them were leased when the idea of doing leasing only came in my mind.
I ordered 100 new planes and returned all planes I had leased when leases expired.
Whenever one of my airplanes got a c check, I didnīt let them fly routes after that but put them to the used market for lease (or sometime for sale).
New airplanes delivered to my fleet go directly to the used market.
In about 3 month, my company will be a leasing only company.
So, I did something like a slow transfer. I could have done a fast transformation, but in this case I would have floated the used market for exemple with 40 B 737-400 in one time.
An aircraft on a profitable routes might always make more money than beening leased out.
But on the other hand you have no fuel costs, very few personal costs, slots and all other stuff.
This means: a leased out airplane earns quite well.
But: your leasing fleet is never completely leased out, maybe 30-40% of my fleet is in the used market waiting for beeing leased out.
So they donīt make money (they donīt cost that much, only assurance wich is nearly nothing), but much more important: every day the are not leased out they are loosing value. And the next c check is coming closer.
Thats why I offer prices 10-25% below the suggested default prices. Because it is better to get a lower rate, than let the plane hang months in the used market.
An interesting thing I learned: Popular, well known planes, BUT totally brand new are difficult to lease out. But the same type but 3-7 years old are easy to lease out.
My business model was to lease out old types below default prices and new above default prices.
Because mostly new airlines leases out aircraft. The have small money and prefer to get two 6 years old B 737-300 instead of one brand new B 737-700.
And the airlines with the big money have their own huge orders for the brand new fleet types.
I have to give a 10-15% discount on brand new A 321 and Bombardier CRJ to get them leased.
So, your clients are mostly starters. The lease 1-3 planes that just had a c check and... 6 month later they bankrupt. You get your planes back and have to do a extra c check before returning them to the used market.
I cannot say yet how profitable it is, may bank is something like balanced because I have large ordes of new delivered planes to be paid and still 20-30 airlines flying on routes and making extra money.
Lets see in some month when my hole fleet is in the used market, if a leasing only company works.
Iīm not sure, if a plane in average can make the hole money you paid for it (Return of investment).
But, it think this might take up to 10years, due to the many c/d checks that has to be done and the "waiting time" in the used market where they are not making money and the lowering leasing rates you get the older the plane gets (by climbing c check costs at the same time).
Iīll keep you updated.
See Last Chance Aircraft Leasing Ltd in DOTM.