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Author Topic: Peanut Airlines and BKS Air Transport investigated and fined  (Read 144 times)

Offline Sami

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After player reports the administration has investigated the plane trading between Peanut Airlines and BKS Air Transport, with the following findings:

 - The two airlines have had a long history of aircraft co-operation like most alliance members have. Peanut Airlines is also active aircraft trader/supplier to several other airlines, and this sort of player-brokering is allowed and even encouraged to keep the used a/c market more active.

 - A total of 157 aircraft transactions between these two airlines, from 1963 onwards, and about 80 since 1980.

 - The analysis focused on the transactions in the recent 5 game years.

 - Many of these are fully normal sales, such as this one: https://www.airwaysim.com/game/Aircraft/View/History/36759/

 - There were several DC-8-60s sales where BKS sold the aircaft to Peanut, and then a conversion was performed into different model, and then BKS leased the aircraft back. These are allowed and within the rules since sale-leaseback deals are part of normal airline trading, and the conversion task in between does not change this. Some of these DC-8s BKS leased have also been acquired from different sources by Peanut so it's not all one-on-one trading. The prices of the sale of these planes between BKS and Peanut were reasonable compared to the age of the aircraft. Some examples:
https://www.airwaysim.com/game/Aircraft/View/History/71154/
https://www.airwaysim.com/game/Aircraft/View/History/63036/
https://www.airwaysim.com/game/Aircraft/View/History/64314/
https://www.airwaysim.com/game/Aircraft/View/History/78205/

 - The sale-leaseback of the DC-8-60s involved about 50 aircraft, and two were purchased instead of leased (https://www.airwaysim.com/game/Aircraft/View/History/71958 & https://www.airwaysim.com/game/Aircraft/View/History/63990). These transactions are against the rules, since here the other airline got the conversion job basically for free and still in the end retained the ownership of the aircraft (do note that the purchase value of the aircraft itself was normal in both transactions, it's just the cost of the conversion). According to BKS this purchase was a player mistake since all other 40+ a/c were leased, which can be believable since this was a large fleet renewal process. Regardless, BKS will be issued a fine of $10 million of this, which is roughly the cost of two conversions. But in the grand scheme, the administration did not found systematical wrongdoings in this case.


 - There have been some transactions of DC-8-60s which Peanut converted the a/c into DC-8-72F and has retained in ownership. These aircraft are mostly in use with his airline, and these are part of the normal a/c trading: https://www.airwaysim.com/game/Aircraft/View/History/68364/   There are a couple of examples that were scrapped a few years after the conversion job (examples: https://www.airwaysim.com/game/Aircraft/View/History/65657 & https://www.airwaysim.com/game/Aircraft/View/History/55695), but looking at the overall pattern I do not see of this being intentional cash moving since the a/c have been in use or for sale for a certain period and some other examples (https://www.airwaysim.com/game/Aircraft/View/History/60161) have been sold onwards.


 - Peanut has provided several MD-80 jets to BKS on lease. These a/c have been direct-delivered from the manufacturer to BKS but he has sold and leased them back, or some of these have been delivered to Peanut or some other airline first and then delivered to BKS on lease. This is part of normal game play since players can of course act as aircraft brokers and sale-leaseback deals are okay (example: https://www.airwaysim.com/game/Aircraft/View/History/91979 and https://www.airwaysim.com/game/Aircraft/View/History/91956/ ). Though we have to be mindful of fair play spirit here: If the a/c were sold in a hugely high price and then leased back at a very low lease rate, and repeated with dozens of aircraft, then we'd need a more careful judgement if this was okay. But in this case the selling price of the MD-80s was about $15mil a piece which is normal compared to the market value (or actually lower compared to 1985s prices since a factory-new MD80 now goes for up to $30mil). The administration thus found no foul play here.


 - Peanut Airlines has been found to be in violation of the game rules with the purchase of four HS121 aircraft from BKS Air Transport without any actual motive to operate, re-sell, convert or leaseback them. The aircraft have been bought at a slightly elevated price, and then stored for one year and then immediately when able they were scrapped. This can be seen as a way to transfer money to another airline and is not a valid game play method. BKS has had over a hundred of HS121s in operation, so this again is not a major rule violation when looking at the overall size and amount of trading both airlines are doing globally. Peanut Airlines will be issued a 30pts Company Image penalty for this. Approximate financial gain of BKS, $15mil, will also be removed from his balance.

Aircraft involved:
https://www.airwaysim.com/game/Aircraft/View/History/51777
https://www.airwaysim.com/game/Aircraft/View/History/56992
https://www.airwaysim.com/game/Aircraft/View/History/51265


As a reminder, rules state the intention for aircraft trading clearly, but naturally all individual examples cannot be listed: "Users are forbidden to effectively transfer money between two airlines by for example repeatedly selling and buying aircraft between each others. Normal one-time sales of aircraft, including sale & leaseback deals, are naturally allowed but transferring aircraft with the only intention of at the same time generating profits/money to one airline is considered unacceptable. The purchasing airline must also have a legitimate use for the aircraft to be purchased - putting the aircraft into storage, scrapping it or letting the aircraft sit idle after it has been purchased is not a fair basis for aircraft sales (especially if combined with an exceptionally low or high purchase price)."


 

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