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Author Topic: New Planes vs. Used Planes?  (Read 619 times)

Offline Unbornio

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New Planes vs. Used Planes?
« on: July 14, 2013, 01:12:55 AM »
So why would anyone order new planes if the used planes (exact same specifications) are cheaper?

It baffles me why people order new aircraft when there's plenty of planes in the used market. Or am I missing something here.. Is it that much better to operate new planes (pax demand?)

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Offline dmoose42

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Re: New Planes vs. Used Planes?
« Reply #1 on: July 14, 2013, 01:47:36 AM »
When comparing new vs. used, new planes generally have higher acquisition costs but lower operating costs as their MX costs are lower.  The point at which it's cheaper to run a new plane varies by model.  Typically the plane age in which new are better is younger in the early era (1950s and 1960s) compared to the later periods as more recent aircraft tend to have lower MX and higher acquisition costs relative to 1950s and 1960s era planes.  in the beginners world, i would say you should stick with used planes until the age is over 15 years, and then perhaps switch to new (but it's a personal decision).  Also, new planes have 8 years to a D-check whereas used planes will need a d-check sooner.

Offline knobbygb

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Re: New Planes vs. Used Planes?
« Reply #2 on: July 14, 2013, 04:23:15 PM »
Remember also that you can get up to a 26% discount on a bulk buy of new planes - if you order enough and pay up front. So then, they will very often be cheaper than used ones even BEFORE you take the running costs into account.

Other reasons:

Not enough used aircraft available when you want to order them. In the "real" worlds the best aircraft disappear more quickly.

Piece of mind, planning, strategy - knowing exactly what you'll get and when you'll get it - even 8 or 10 years in advance.

You can order the exact seating configuration you want at very little extra cost. Re-configuring old planes can be (relatively) expensive.

The used aircraft may not have the exact engine choice/range you want.  You can end up with a complicated patchwork fleet.

Tax planning.  When you make a large profit you really need to spend a lot of money at year end to save tax, so you effectively get a further 20% to 30% discount on that large order.

There is a (quite small) advantage to having a newer fleet apparently.  I believe it affects your company image and if you play in an alliance it also affects that.

Sometimes, even if there are 50 or 100 of what you want available, it may be to your advantage to keep a production line open so you can buy more later. So ordering (I think) five new aircraft keeps the line open for another 9 months or so.

When you have a REALLY big airline, or when you open a new base for example, three aircraft a week is often just not enough.  If you're ordering from 4 or 5 production lines as well as taking used aircraft you can grow at an impressive rate - 5 or 6 a/c per week.
« Last Edit: July 14, 2013, 04:40:03 PM by [SC] knobbygb »


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