Players leasing brand-new aircrafts...

[stealy]

I have always wondered why people keep leasing new aircrafts with outrageous pricing, but somehow manage to do fine. I see a ton of players in BW2 leasing new A350, B787, and B777 with price tags of at least 350 to 400+ million dollars each. Their monthly lease cost is about 4.5 to 5.5 million dollars each per month, even after large order discount. And these airlines are quite successful, at lease in BW2.

I seem to be doing pretty good with my used A330/340 and 777 that cost me on average 1 million dollars each per month, and some as little as 700K per month to lease. I also own more than 1/3 of my 110 aircrafts fleet, with 90% of them bought/leased used.

I understand that their brand new A350 and B787 are more fuel efficent than my old A340s and their maintenance costs are lower, but still...? I don't believe the slightly better fuel efficiency and lower maintenance costs are worth spending 4 million dollars more on each aircraft per month. Used aircrafts are quite easy to find in the used market in BW2, so it's not like they have no choice, but to lease new.

About half of my fleet are used A330/340 and B777 for long-haul flights. Assuming I decided to switch all my used A330/340 and B777 to brand new A350 and B787, I will be spending at least 200 million dollars more per month on lease. ($4,000,000 X 50) Sure... my fuel and maintenance costs will go down, but nowhere near 200 million dollars.

To me, leasing new aircrafts (especially 400 million dollars piece of flying machine) is a terrible idea. Your lease payments will be enough to purchase the entire plane in 6.5-7 years of lease anyway. Buying them is better, but buying them in a short game world like BW2 is also a bad idea as you cannot use them to their fullest life-cycle and you are spending too much on a single plane, which slows down your growth. You will also have a hard time selling them later as nobody wants to buy expensive used aircrafts with only a few years (or less) of game time left. I believe buying new aircrafts that cost 300 to 400+ million dollars each only really make sense in a long gameworld as long term investment.

So what gives? Why are these airlines doing that? I would love to have a fleet of modern state of the art planes like A350 and B787 too, but it just doesn't make ANY sense financially. What do you think?


Edit: Oh... and not to mention the A320neo and A321neo, which are VERY popular (270+ order backlog...) and cost 135 and 160 million dollars each respectively. Lease payment per month is about 1.6 to 2 million dollars each depending on the model. Just why...? I could buy a 10-15 years old A320 in excellent conditions for 30-40 million dollars, or lease for 350K to 500K dollars per month. I really don't get it. 

[Tha_Ape]

More or less like you.
But I would insist on the fact that this is a BW. Could not happen in a real GW without having a BK in about 6 months.
BW's settings are easier, there is usually more demand and less competition, and lower fuel prices, making the lease ok.

So basically, you're on the right track and they aren't. However, them or you, in a real GW in the 2000s/2010s, you must own your fleet. Particularly the LH one.
(except when you're getting started, thus having no choice but to lease).

Then, if you go for cheap or expensive depends on many factors (potential "too small", maintenance getting crazy, support from your alliance, factory price that might offset the increased maintenance, etc.).

[Cedric3108]

I think you summed it up pretty nicely.
The things to consider here are: short game world and limited used marked.
As you said, there are penty of used 777 etc on the marked. When I was playing that world (before I quit in order to focus on the Regional Challenge) I was also operationg a fleet of 777-200s. While I was always able to find some, it sometimes was hard to come by frames that were good value for money. Some of the really good players expand very rapidly and they could not possibly do that with used marked frames and still keep commonality (espaccially if you also look for common engine make). In order to keep their pace up, they must buy new. And as you already said yourself, since the World is so short, it doesn't really make that much of a difference. Mostly lease/buy brakes even at around 6.5 years. If the world has only 7-8 years remaining you might consider leasing, because you will be able to get even more frames more quickly, because you don't need a lot of cash to order a whole bunch of planes.
If you think purely economical, you're right. Leasing actually is always a bad idea if you have the cash and time for buying. Lastly, wether new shiny A350s or used 777s are the better way, depends a lot on the fuel price. It's hard to predict, but usually going with used 777s is the safer bet.

Greets,
Cedric

[wilian.souza2]

Leasing new is generally a stupid thing, especially if you are a new airline and the aircraft is a popular model, but in some cases it's worth it.

In the "real" GW2 I am playing I am currently leasing new LH aircraft and doing good so far. That's because I have good profits in my current operations, I've found lots of fat demand on some routes I'm opening and the circumstances are favorable - a lot of airlines have BKed in the last fuel spike, it isn't worth using past-gen aircraft (707s, DC-8s, VC10s) anymore and the demand for new aircraft is not high enough to make their prices skyrocket yet - I'm actually running after them before it happens because I don't have much cash.

[Tha_Ape]

@Wilian

Saw you order those leased 767-200ER. The prices on those are actually sky-high. Not saying you won't make it (you do pretty well, make some mistakes but also solve problems pretty swiftly), however on the longer run this is not a very good option.
Now you don't really have the choice, because of your cash, but try to organize strictly, plan well ahead, have a versatile fleet and stick to it. Because from the late 90s on, owning his fleet is mandatory. At least a good fat part of it.

[48days]

Some of the leasing decisions I've seen in BW2 are mind boggling.  I'd love to run a fleet of brand new 737 Max and 787 aircraft, but when I can pick up a used 737-700 for 19m, the minor fuel and maintenance savings can't justify the difference in price.  I'm running 74 737(600,700,700C,700F,800) and 14 777(200,200ER,300) for 8.8m in weekly leasing fees.  Leases are only 11.4% of my expenses.

[wilian.souza2]

@Wilian

Saw you order those leased 767-200ER. The prices on those are actually sky-high. Not saying you won't make it (you do pretty well, make some mistakes but also solve problems pretty swiftly), however on the longer run this is not a very good option.
Now you don't really have the choice, because of your cash, but try to organize strictly, plan well ahead, have a versatile fleet and stick to it. Because from the late 90s on, owning his fleet is mandatory. At least a good fat part of it.

Yes, I know that. I hope soon I can make some of those leasing orders become purchase orders and that some Alliance partners supply me some more aircraft. This decade is a critical one and will define how successful my company will be, and I've done everything to get the most efficient and versatile fleet.

Some of the leasing decisions I've seen in BW2 are mind boggling.  I'd love to run a fleet of brand new 737 Max and 787 aircraft, but when I can pick up a used 737-700 for 19m, the minor fuel and maintenance savings can't justify the difference in price.  I'm running 74 737(600,700,700C,700F,800) and 14 777(200,200ER,300) for 8.8m in weekly leasing fees.  Leases are only 11.4% of my expenses.

Use the strategy that's working for you. My first ever game world was a Beginneer's world and I made a big airline there using mostly used aircraft. All of my biggest planes (A321s and B767s) were bought used, and as the game ran towards the end I could buy newer and newer used airframes (which I see now as a reflex of a pre-game end cooldown of the market). So don't delude yourself into having the shinest new aircraft of the world, be pragmatic and always look for the best cost-benefit!

[Cardinal]

Some of the leasing decisions I've seen in BW2 are mind boggling.  I'd love to run a fleet of brand new 737 Max and 787 aircraft, but when I can pick up a used 737-700 for 19m, the minor fuel and maintenance savings can't justify the difference in price.  I'm running 74 737(600,700,700C,700F,800) and 14 777(200,200ER,300) for 8.8m in weekly leasing fees.  Leases are only 11.4% of my expenses.

Use the strategy that's working for you. My first ever game world was a Beginneer's world and I made a big airline there using mostly used aircraft. All of my biggest planes (A321s and B767s) were bought used, and as the game ran towards the end I could buy newer and newer used airframes (which I see now as a reflex of a pre-game end cooldown of the market). So don't delude yourself into having the shinest new aircraft of the world, be pragmatic and always look for the best cost-benefit!

Maybe they bought the shiny new MAX because they just wanted to? Some players have put in the time and many trial-and-error trips to bankruptcy court to learn how to make Concordes profitable because they just wanted to fly Concordes because Concordes are cool. If you've got the cash to burn and really want to fly the pretty 787, why not? It is just a game, after all 

[Zobelle]

Leasing new is generally a stupid thing, especially if you are a new airline and the aircraft is a popular model, but in some cases it's worth it.

In the "real" GW2 I am playing I am currently leasing new LH aircraft and doing good so far. That's because I have good profits in my current operations, I've found lots of fat demand on some routes I'm opening and the circumstances are favorable - a lot of airlines have BKed in the last fuel spike, it isn't worth using past-gen aircraft (707s, DC-8s, VC10s) anymore and the demand for new aircraft is not high enough to make their prices skyrocket yet - I'm actually running after them before it happens because I don't have much cash.

Bad move, 762ER are a RAW deal right now.

[gazzz0x2z]

It's always context dependant. In current regional challenge, where demand is insanely high and planes available far too small for their markets, leasing new the very costly 195E2 is actually a clever decision, because it's just the biggest thing that can fly. I can afford to purchase them 100% prepaid because I made an OK start, but even a struggling company should be able to make money on them.

OTOH, in current GW3, I'd advise to lease only the cheapest airframes, either cheap new, or old used. Demand is well covered, and you can't double your prices to cover the expenses.