aircraft financing

[hmellouli]

can an option for financing aircraft acquisition be added to the aircraft acquisition process? general loans are much harder to get, and this would be secured, so it would be easier to approve for large enough amounts. I'd rather have these loan costs than lease costs, which are much easier to pay for as a young airline.

[JumboShrimp]

This is one of my pet peeves.  You are extremely limited (and capped) on loan size, but you can have unlimited amount of money in leased aircraft. 

I think these 2 should be balanced.  Meaning higher limit and no cap on loans, and some reasonable limit on how much you can lease.  Some limit on amount of aircraft leased would greatly slow down the early rush, but extend the "exciting" phase of the game.

Also, I believe the system should be using interest rate and credit rating for new leases.  Right now, AAA airline gets the same lease term as D rated airline.  Also, not realistic.

[brique]

Agree that the airline credit-rating should affect lease-terms offered : I think a simple 'fix' would be to time-limit lease terms for lower grade credit-ratings : thus allowing a penalty/bonus element in the cost reflecting airline credit-worthiness/ risk. example : D-rating means you can only get one-year terms and have to renew annually at higher rates : better the rating, the longer(cheaper) you can opt for.

Not sure that a hard-cap on numbers is workable in game terms : it would hit small-plane operators much harder than large-type operators without reflecting the actual assets involved : 10x E120 versus 10x B733, for example. You'd have to look to actual total value as the limiter : which kinda happens anyway due to limited start-up cash : if you get your first routes well planned and earning early, you should therefore benefit from being able to expand using that revenue stream : its the reward for getting it right from the get-go : being limited to the same numbers as less-able players isnt really encouraging smart early-stage play.

[hmellouli]

leasing is another story. I'm talking about making part of the aircraft buying process (new or used) a screen that would give you loan options using that aircraft as security, making it a secured loan. that is how real life airlines do it anyway. they get a secured loan as part of the aircraft buying process.all you are making then is a deposit, and loans kick in for the financed portion as you get them. this would allow good airlines with decent revenue stream to conserve cash. in my case i could never afford to buy an airplane because I usually operate LH routes, which require a much more expensive type of aircraft. one or two aircraft would wipe my cash reserves completely, and that's if i save up and not expand by leasing other aircraft for expansion. I would prefer to buy aircraft to save on costs and to increase my airline value.

[JumboShrimp]

Agree that the airline credit-rating should affect lease-terms offered : I think a simple 'fix' would be to time-limit lease terms for lower grade credit-ratings : thus allowing a penalty/bonus element in the cost reflecting airline credit-worthiness/ risk. example : D-rating means you can only get one-year terms and have to renew annually at higher rates : better the rating, the longer(cheaper) you can opt for.

Not sure that a hard-cap on numbers is workable in game terms : it would hit small-plane operators much harder than large-type operators without reflecting the actual assets involved : 10x E120 versus 10x B733, for example. You'd have to look to actual total value as the limiter : which kinda happens anyway due to limited start-up cash : if you get your first routes well planned and earning early, you should therefore benefit from being able to expand using that revenue stream : its the reward for getting it right from the get-go : being limited to the same numbers as less-able players isnt really encouraging smart early-stage play.

I think the lease calculation should be just slightly adjusted.  The lease calculation implies some interest rate, that is fixed for every single player, and it is also fixed for the length of the game.

I would just replace this hard coded interest rate, replace it with the system variable interest rate + margin equivalent to player's secured loan margin.

This would open up 3 separate dynamics for the system:
- Sami can set up interest rate fluctuations based on his economy model.  So global interest rates would actually matter (they really don't matter now very much)
- leasing cost of aircraft would be different for every single player.  Credit worthy clients would get slightly better leasing terms that C or D rated players.
- when leasing out aircraft to less credit-worthy player, a player who is more likely to BK and return an aircraft in poor shape, the lessor would be receiving slightly higher lease payments to compensate for this risk...

Anyway, all of these would lead to a more dynamic AWS...

[hmellouli]

Sami, what is the feasibility of this? it would be awesome to have!

[hmellouli]

maybe the simplest option here is to add a lease to own option?

[brique]

I think the lease calculation should be just slightly adjusted.  The lease calculation implies some interest rate, that is fixed for every single player, and it is also fixed for the length of the game.

I would just replace this hard coded interest rate, replace it with the system variable interest rate + margin equivalent to player's secured loan margin.

This would open up 3 separate dynamics for the system:
- Sami can set up interest rate fluctuations based on his economy model.  So global interest rates would actually matter (they really don't matter now very much)
- leasing cost of aircraft would be different for every single player.  Credit worthy clients would get slightly better leasing terms that C or D rated players.
- when leasing out aircraft to less credit-worthy player, a player who is more likely to BK and return an aircraft in poor shape, the lessor would be receiving slightly higher lease payments to compensate for this risk...

Anyway, all of these would lead to a more dynamic AWS...

I like your ideas: having dabbled in the player-broker side for a few games now; realistically, the fixed return at a rate which often falls below what could be found by leaving all that cash in the bank doesnt encourage brokers : but I see a healthy player-broker element as necessary for the game ; its often all that keeps some small/medium types in production long enough for players to benefit and be able to plan beyond the next 6-month death sentence.

[hmellouli]

Rather than starting a new request, I'd like to bring this from the dead. would be awesome to be able to mortgage my aircraft rather than needing to lease.

happy to help with any of the structures or concepts as I do work in aircraft trading and finance.