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Author Topic: Where am I going wrong?  (Read 2350 times)

Offline JumboShrimp

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Re: Where am I going wrong?
« Reply #20 on: February 12, 2012, 05:25:53 PM »
So now that I've gone away and done most of what I learned in this thread, I thought Id ask another question, this time with loans.

I know that you can secure a loan on an aircraft and get more cash while doing so. I was wondering if its possible to buy outright a small low value aircraft, get a loan on that to buy outright an even larger aircraft and get another loan on that and then continue business as normal with (hopefully) a much larger loan than I would get from just the small aircraft. Is this a good strategy or have I got things completely wrong?

No, not a good strategy.  First, the amount of security is approximately the amount of load you can get.  So if you use 20 mil aircraft as security, you will only get 20 mil additional secured loan.

Second, and this is a mistake that even experienced players make: buy the first aircraft you can afford, meaning a small aircraft.  You should buy only aircraft that you are 100% sure you are going to fly it until the end of its useful life - or aircraft you can readily sell on the used market.  If you don't have a good candidate (aircraft), just save your money and wait.

If you look at the used market, and if you see a the aircraft you are considering offered by several brokers - it is probably not a good aircraft to buy.  You can lease it at good terms, and it is also an indication that other players don't want to fly that aircraft...

As far as growth strategy based on loans, it is only good strategy when the game world opens, during the initieal frenzy.  You can get aircraft quickly and you can secure production slots on new aircraft.

During the middle of the game, growth using borrowing just does not work well in AWS.  There is a hard limit on the total loan available ~500 mil, once you hit it, that's it.  The loans are only good as a rainy day fund.  Loan availability saved a lot of airlines after 9/11.  Those that bankrupted probably were tapped out on the loans.

Online schro

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Re: Where am I going wrong?
« Reply #21 on: February 12, 2012, 06:39:15 PM »
secured loans have to have more in assets (planes) than their value, so you can't quite pull a wall street like you described. There is also an absolute upper limit on secured loans that you will hit. They also mess with hour taxes in an unfavorable manner, so I try not to bother with loans unless I can repay them within that game year (or have their value in cash, netting out to a marginal annual loss).

Offline pndsc

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Re: Where am I going wrong?
« Reply #22 on: February 23, 2012, 02:41:13 AM »
Thanks for your help guys, Ive gotten "further" than I ever have before but now I feel like I'm about to post an early post-mortem.

Around the 20-aircraft mark I decided to open a second base. I consolidated my previous loans into one larger, lower cost/month loan and took out another, similar size loan to get the cash for the second base.

I consider this the first major mistake.

I opened the base and got a fuel contract since those 20 planes were burning around 2.2mill in fuel each week. I then pondered getting my first new aircraft, opting for two Tu204s (cheap, readily availalbe) to fly routes around ~2400 miles. They will soon be arriving. At the same time, I'm currently so far in the red that I cant afford to renew the yearly leases on three of my current aircraft.

Since that point my profits, growing with each aircraft, have become static and look set to plunge rapidly in the near future. As it is theyre pretty slim. I'm about $4million (on average) in the red, havent made any loan payments for the previous game month and where I was taking in about 1.6 million per week my last couple of weeks have been profits of 300k and 100k, in a week where for once I dont have any c checks.

Given that I havent made any loan payments in so long, I'm deep in the red and a few more C checks and lease renewals coming up soon, I get the feeling that its all over for this incarnation of Violet Club.

Is there anything you'd like me to add?


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