Taking a loan or not taking, share your experience

[gorillaunit]

In this simulation, I see many "airline company" have more than 100 fleets, no matter in which game they are joining at. I just curious if everyone of them has taken a loan. Is there any owner who never take a loan? Share with us please if you don't mind, thanks !

AD Airlines (currently having only 2 leased airplanes)

[swiftus27]

There is too much profit to be made.  Many dont use loans.

[Maarten Otto]

Loans can help in the beginning by expanding fast.

[Branmuffin]

I try to avoid loans as much as possible... unless, however, I see a rare plane in the used market that I REALLY want, and I am just shy of the amount I need to buy/lease it.  Then I'll take a loan to cover the difference.

[Hwoarang]

If you take out a loan, pay it back asap, but try to avoid them.

[ban2]

i use the loans to buy not lease, however take as little money out on loan as possible.

i also try and have repayments over 1 yr it costs a lot less in interest. i compare the loan payments against the cost of the leaseing the desired plane i wish to purchase. if the loan payment is less than the leasing cost i take the loan out becuase i know after the loan is paid the plane is mine and increases my airline value.

[gorillaunit]

It is nice and of course very helpful for me and probably for others, to know some thoughts from other airlines operators.

[Talentz]

I rarely take loans. I prefer to create a stable airline rather then taking loans and rapid expanding.

Haven't met someone who has used that strategy and won against me in my hub...




Talentz

[LemonButt]

In my opinion, NOT taking out loans is a bad move as you can easily make more in profits than the interest charged on the loan.  The trick to rapid expansion in my experience is leasing as many (newer/good) planes at once in the beginning as possible.  Since you pay 4 months of lease up front, you basically have no lease payments for 4 months.  Since most aircraft will generate their lease payment + profit, after 4 months you'll have your initial lease payment as well as a nice profit on top of that.  After this point, you can either pay the loan back in full or use the proceeds to lease another batch of planes and keep expanding.  It is important to recognize that your company's profit margin on a weekly basis will go down considerably as the weekly payments for leases will be kicking in, taking away the huge profits you were experiencing.  I've got a 6 year old airline in the ROTMA game with 172 aircraft, including 40 A380s, and another 100 planes on order using this strategy with zero debt and more money than I can spend (and I own 66 of my aircraft).

Building a stable airline = generating profits, which can only be done by expanding and spreading the risk across many routes, especially entering a game late--if you only have one route and a big established airline decides they want to expand onto your route, you're probably in trouble.  Take out loans and get as many aircraft in the air as you can (quality aircraft, keeping fleet commonality in mind of course) and you'll earn far more profit than you will owe interest.

[CX717]

my advice is to take loan for new investment(buy plane lease plane) but not take loan for company general expenditure. Because investment will make money buy expenditure not.
And stay positive cash flow..

[munipandita]

Well, i am not a very experienced user, but i use to take loans..

As said before, you should take a loan only to make investment.. not to cover operation costs.. At least, if you get surprised by a C or D check, and you don't have much money to cover this huge cost at once, then take a loan..

I always pay them in 10y... The Weekly payment is really insignificant when compared with the profit an aircraft i buy with this loan makes... This is working really fine for my by now.. i could expand a lot ... i don't know if it will stop working (if i'll get bankrupt), but this is my experience..