Changing an order to pay-up in full before delivery

Started by Cornishman, February 05, 2022, 03:34:11 PM

Cornishman

Hi - I have a question that really puzzles me about aircraft orders that I have made, (50 of each type) some with deliveries having commenced already, but still many more to be delivered over the next 2 years, I wanted to make better use of some cash I have to be more efficient and pay-up 100% on these orders that were made with either 40% or 60% down at point-of-order. First puzzling thing is I am not able to pay-up early or make any changes (other than seating) on the next approx. 10 months of deliveries. Surely IRL any company would be delighted for you to pay up early ahead of delivery?  You can't argue that it's a "contract with early repayment charges" otherwise then the entire order should not be possible to change on payments.

But then a weird situation arises with the deliveries that are more than 10 months away.  When I paid off the additional Dash-8Q400 order, it offered me a saving of about $220k on each aircraft - so I changed the order which gives me an overall saving of $6.6m  Great!

Then I thought to do the same for the 767s I have on order, with still 17 planes that I am permitted to change to pay-up in full, BUT....  if I leave the order alone as it is with 40% to pay still on delivery, then they want $53,274,430 upon delivery of each plane.  INCREDIBLY: If I change the payment right now, they would want $61,386,960 extra per plane immediately.  That would be an insane extra $8.12m per plane and so an extra $138 million on the deal ???

Then I looked to see what happens if I pay-up for the rest of the A330-200 I have ordered and again it reverts to offering a saving of about $3m per plane if I pay up now.

Can anyone explain this? - doesn't make any sense to me? (naturally I told the Boeing accountant to stuff their offer  :laugh: ) Seriously though, is this a bug - should I post in the Bug section?

schro

When you make a change to the order, it reprices the planes based upon current market pricing and slaps on some arbitrary change fee. You're generally better off not doing that sort of payment plan with plane orders unless the pricing has fallen through the floor.

The game manual has a few things to say as well:

Quote
To change the specifications of an order the delivery date must be more than 10 months away. This is because the manufacturer must have time to order the correct parts and plan the production properly. If this timeframe is met you can change any part of the order freely (model itself, engine/weight variant, seat config and financing type). You can also edit multiple order slots at once (by using the checkbox selectors) or only one at a time if you wish.

You can change the seating configuration and the home base airport for the aircraft up to 1 month prior delivery.

Please remember that editing an order after you have made it is always more expensive than putting all right at the first order. There is a fixed fee for every change you made and also the other prices of the order will change (to worse usually).

If you wish to change the aircraft model in the order please be aware that you can only choose such a model that was in the production at the time you originally made that order. This is a game rule to prevent players from abusing the system by ordering lots of cheaper / worse models at the launch of new aircraft model when they know that a new and perhaps better model will be launched in the very near future, and then converting the orders to that model and gaining advantage in the production queue.

When you have chosen the order slot(s) to be edited you will be presented with a similar window of options than you had when originally making the order. Please make the appropriate changes and then press the Get price quote button which opens a new field with information about the new prices and payments if you accept the change.



Cornishman

#2
Thanks schro, that might explain the mechanics and if there were any technical changes then I get the "re-pricing" to some extent. But to change payment terms that's not at all realistic - no business IRL would say halfway through a contract, "if you want to pay early then we'll charge you an extra based on the fact that "if" you ordered them these-days the price of those planes would be higher" The current price should have no bearing on the Terms of Contract we signed last year or whenever it was. Acceptable contractual answers could be -
*Acceptable, but there's no discount and price stays the same, or
*Acceptable, there's some discount for early payment, or
*Acceptable, there's and there's a nominal administrative charge for the change in the contractual terms, or
*No change in payment schedule permitted.

Another place this falls apart is - if the reason the 767s are now more expensive and that's why the early repayment would go up..... then by exactly the same reasoning why hasn't that happened on the A330s as well since the price for them has also risen to a similar degree since I placed that order - yet that early repayment would be cheaper?

knobbygb

Are we sure that changing the payment terms of an order re-calculates based on the current price of the aircraft?  It doesn't actually say that in the manual quoted above.  I was always under the impression that any recalculation came out higher because the bulk order DISCOUNTS were recalculated (i.e. lost, or at least reduced).

Cornishman

Quote from: knobbygb on February 07, 2022, 05:38:41 AM
Are we sure that changing the payment terms of an order re-calculates based on the current price of the aircraft?  It doesn't actually say that in the manual quoted above.  I was always under the impression that any recalculation came out higher because the bulk order DISCOUNTS were recalculated (i.e. lost, or at least reduced).

Some are coming out higher (the 767s) while others are coming out lower (the Q400s and the A330s) - so I can't follow what's the process or why.

AngryOpossum

I just bought a bunch of 777Fs at 80% down. If I want to pay the remaining 20% early, it will cost me $40M to pay off the $28M balance. Crazy.

Cornishman

I do think the "mechanics" determining this re-repricing must be in need of some attention. As I said - no two orders seem to follow the same pattern - not even remotely. (IE:  some get more expensive / others less expensive and also no comprehensible reasoning as why which order will recalculate the way it does.