Leasing costs rise?

[geoff76]

I have noticed this in Jet Age #4, but I bet it is a function of the game engine itself.

My leasing costs for existing, already flying planes, keeps rising a few $k periodically.  This cannot be due to inflation modelling in the game, since in real life, prices are only adjusted upon renewal of leases and on new orders. Once a contract is signed, the prices are fixed until renewal!

So what is going on?  Is this a bug?  I am having a hard time getting enough profits to move in a positive financial direction without the game mysteriously swiping more of my hard earned cash!

Thanks for anyone's insight and explanation.

-- SuperGeoff

[Sami]

If you have for example 1 year lease, and it is automatically renewed it goes usually up certain % due to re-negotiating the deal etc.

[jamboy2378]

Shouldn't it go down, the plane is older by the end of the lease? And I still haven't figured out why training costs almost as much as salaries!!!

[Curse]

Shouldn't it go down, the plane is older by the end of the lease? And I still haven't figured out why training costs almost as much as salaries!!!

Due to the high profit margins sami uses staff costs (etc.) to cut them a bit.

[Pilot Oatmeal]

Due to the high profit margins sami uses staff costs (etc.) to cut them a bit.

Yea but its totally unrealistic... you wouldnt pay more for a lease as the car/plane/boat/train gets older and more used... it doesn't make sense

[alexgv1]

Yea but its totally unrealistic... you wouldnt pay more for a lease as the car/plane/boat/train gets older and more used... it doesn't make sense

You would if:

Inflation Rate > Depreciation Rate

[filipebravo]

Planes have a slow depreciation rate, due to very strict maintenance rules and huge initial investment

[Pilot Oatmeal]

Planes have a slow depreciation rate, due to very strict maintenance rules and huge initial investment

I understand that but that doesn't mean that it goes up in price! lol

[alexgv1]

I understand that but that doesn't mean that it goes up in price! lol

It's counter-intuitive, I agree. But so are most things to do with planes 

[MRFREAK]

Yea but its totally unrealistic... you wouldnt pay more for a lease as the car/plane/boat/train gets older and more used... it doesn't make sense

Not in the car rental business were i come from

We got a BMW that's driven alot of miles, though it cost just as much to rent as a new BMW that's only driven a couple of miles.

[swiftus27]

You would if:

Inflation Rate > Depreciation Rate

But ticket prices should rise 1:1 with inflation.  So at the end of the day it may not happen. 

[filipebravo]

This is market working. Plane gets older, but there's demand -> price goes up + inflation

Like said before, ticket prices should compensate

[dunbar7376]

Hello All,

There are three things going on: finance, market(ing) and "sales."

alexgv1 is spot on with his post (on depreciation etc.) in explaining the finance side; filipebravo is spot on with his comment (re: demand/price wtc.) on the market.

The third notion may be one of sales. Imagine a salesperson from a company leases you a 727 for 3 years at $100 a month. In 3 years, when the lease expires, there are no 727's on the market, but your existing 727 is now $120/mo to renew. Used 737's are available, but they are $300/mo.

What are you going to do? $120/mo may be more than $100/mo, but it is still less that $300/mo (assuming the added benefits of the 757 are not immediate). Because of the market (filipebravo's comment, i.e. there are no more 727's, so demand > supply), the salesperson has you over a barrel.

This way of thinking about it may go some way towards recognising the nice touches in this game that make it so much fun.

Tom Marvan.

[EYguy]

Dunbar, usually leasing companies and their customer avoid this kind of problem during the bidding phase: and it's just a non sense to pay higher fees for somethign which is 1 year older. The deal usually says that you're not going to pay fees higher than the ones already paid and the amount of the future fees is usually determined using an "impariment test" of the a/c. So If you got a lemon, you'll probably even get a discount when you renew the contract!

[filipebravo]

Then it's good sense vs. machine logics. Guess sami has to create a rule where fees can't be higher when leasing contracts are renewed.

[flightsimer]

Im bringing this up because i noticed it happening randomly in MT4.

over about a 6-10  weeks time (about a week ago), my monthly weekly leases went up about 1.5mil gradually. However, it then went back down to the amount it was at before it started going up and is still there now. but there was no reason for it, i didnt have any new a/c that weekly leases would have started and it especially didnt make sense since it went back down to normal.

[lilius]

Dunbar, usually leasing companies and their customer avoid this kind of problem during the bidding phase: and it's just a non sense to pay higher fees for somethign which is 1 year older. The deal usually says that you're not going to pay fees higher than the ones already paid and the amount of the future fees is usually determined using an "impariment test" of the a/c. So If you got a lemon, you'll probably even get a discount when you renew the contract!

You are only taking monetary values into account and that is the problem. Paying the same amount "in monetary terms" next year could very well be a discount if you factor the real value of money.

[lilius]

Im bringing this up because i noticed it happening randomly in MT4.

over about a 6-10  weeks time (about a week ago), my monthly weekly leases went up about 1.5mil gradually. However, it then went back down to the amount it was at before it started going up and is still there now. but there was no reason for it, i didnt have any new a/c that weekly leases would have started and it especially didnt make sense since it went back down to normal.

Check if prepaid leasing periods were ended during this time and you started to pay normally for your aircrafts.

On a different note. The raising costs for fuel should also do its share for inflation of the gameworld. I wonder if the game engine works like that?

[flightsimer]

Check if prepaid leasing periods were ended during this time and you started to pay normally for your aircrafts.

On a different note. The raising costs for fuel should also do its share for inflation of the gameworld. I wonder if the game engine works like that?

i said i didnt have any new aircraft that i would have started having to pay leases for. It went from from like ~2mil up to and peaking at around 3.5 and then dropped straight back to ~2mil.

[lilius]

That is what you said yes. So no new orders at all during that time? That would be a mystery.