Is there a point to buy out planes from leasing? Yes I do understand that you dont have to pay the leasing fee anymore, but if you pay lets say 400 mil on planes than it takes a lot of time to get these 400 mil back from your investment. The planes are calculated into the companys value as I understand. So, Sami or someone, why should anyone buy out planes?
A) You dont have to pay stupid leasing costs - which can chage route profitability and other things
B) It adds value to your company, a major thing (especially if your into showing off your company)
C) You can than sell or lease old planes.
Overall, it saves so much more money to buy planes. Typically, I lease planes from the market till I have 30-50 planes, before leasing them new. By the time I've replaced all those older ones from the market, I start buying the newers, unless I know I will replace them again, which can happen.
Im doing an experiment this game.
I am buying a 737-300 that I lease used when I get a new replacement.
I lease the plane for the max I can. I am making 433k per month in leasing fees.
So, a $25,000,000 plane earning 400k per month means that the plane will pay for itself in 63 months... AND you still have a plane with value so you can keep leasing or sell it outright.
Since I am based in Sydney, I fear that I will have to be a plane broker in order to keep profits rolling in.
Being a 'broker' is very profitablt but usually you very often end up the plane having returned just when the C/D check expires.. ;) Plus always the risk of not being able to lease it. But popular models should have no problems..
Quote from: sami on February 06, 2009, 09:07:26 PM
Being a 'broker' is very profitablt but usually you very often end up the plane having returned just when the C/D check expires.. ;) Plus always the risk of not being able to lease it. But popular models should have no problems..
i'm finding that out the hard way, my aircraft got delivered just when other airlines went bust now the market have plenty of 2-3 yo aircraft
Yea, in one of the betas I tried to lease out some IL-62's and Tu-154's that I had no use ... wasn't that successful .... :P
QuoteYea, in one of the betas I tried to lease out some IL-62's and Tu-154's that I had no use ... wasn't that successful .... :P
lol, I remember that. You switched to DC-9s after while, didnt you 8)
Talentz
Yes... a disgrace for my Soviet Airline ..
(that was in 1960/1970)
I also made that calculation for purchasing aircraft vs leasing it, don't remember now which model was that, but the outcome was that the investment will not come back before 7 game years, so if the game ends sooner, it is pointless to buy aircraft.
IMO, game time span is way too short for buying aircraft. In real life aircraft are bought for 20-25 years.
In game, before 7 years you hardly have money to buy a few B737 or even 767 a/c, and for another 7 years it is pointless to get rid of cash that you need for your expansion.
And getting short on cash can cause problems when you fall into a few C checks in a row. On top of that, when you have leased aircraft, you can easily refrain from extending lease and change type of aircraft rather than get stuck with the old one.
Lease is king, for now at least. in game 3 i'm experimenting with buying aircraft as soon as i can afford it, they're only regio props but it takes several months to save up for a single plane so no discount :(
I think the same way as Kastor....but Sami said in the manual to buy the planes if you can...dont know, maybe have to experiment myself!
QuoteI also made that calculation for purchasing aircraft vs leasing it, don't remember now which model was that, but the outcome was that the investment will not come back before 7 game years, so if the game ends sooner, it is pointless to buy aircraft.
I disagree. Which aircraft did you make those calculation based on? I have an all owned 742 and 743 fleet. Most were bought for 80-120M a piece. They avg 1.8-2.5M a week profit (with heavy competition to boot!)
At 2M a week profit.. 8M a month, it roughly took 1 or so years to get my "investment" back. That was almost 3 years ago -_-"
So no, owning will always be more profitable. Leasing sucks when you get bigger aircraft. Those very high lease payments will be with you every month till the end of the lease.
Your costs for leasing stay the same. However, your route profit wont be the say 5 years down the line. Maint costs go up as well as competition. That doesnt mean your lease payment goes down, does it?
I can tell you the most profitable aircraft in my fleet are owned 747 classics. Sure, the 744 makes great money. But the profit margin is no where near the 747 classics. Even my new "efficient" 777s arent anywhere near in terms of profit margin. The high lease takes it toll. While my 747 classic make pure profit. Because they paid for themselfs 1-2 years ago..
Besides, if you calculated the leasing vs owning. You should have realized that leasing an aircraft (most) for 7 years costs about the same as buying from the start. Too bad after 7 years, you dont own a penny of that aircraft's value. You want to buy it after the lease is up? You have to pay "market" value for it. Thus, you end up the real loser paying almost double what that aircraft is valued at.
As the game world grows, you'll start to see "all" leased fleet airlines going BK. Because, as I've said many times before, your costs always increase. Your income mostly goes down. You may be able to make good profits now, but 3, 5, 7 years from now, your profits wont be the same. But, lol, that locked in 7 year lease payment will.
Will you have the money to keep paying for it 5 years down the line? I hope so, if not, you'll be filing for unemployment soon enough.
Talentz
My calculation was made for the Dash 8 Q400.
Price to buy: 22.415M
monthly lease: 0.283M
Investment returned after 78 months = 6 years and 6 months
Boeing 747-400
Price to buy: 214.55M
monthly lease: 2.716M
Investment returned after 79 months = 6 years and 7 months
Two very different planes, two very similar results.
Plus when you have your own aircraft, you HAVE TO make a D check. If you take an a/c for seven years you return it and make no D check.
Adding cash frozen in aircraft and slow expansion, well, Talentz, you didn't convince me, but we will see in next half of the game.
in view of limited slots and strong competition i am in favor of leasing and expanding quickly without, as Kastor righteously pointed out, freezing my cash in buying a/c. Buying the a/c is not profitable enough considering the limited time the game lasts.
I tried to become a plane broker in game 1. I based myself to Japan to make good money early on. I actually managed to get hold of 5 ATR-72-200s and 8 A320-200s early when i could ask anything from them. After that big lease orders for new planes were rolling in and delivery times went too long to actually make money by buying and leasing out planes.
Today I have 27 planes leased out earning me some $12M per month... Peanuts compared to my 40 (own) aircraft fleet earning $200M in ticket income.
edit: Added C/F ticket income
everyone's situation is going to be different.
I am using it to supplement my income and as a base to borrow funds against.
I keep telling myself to start buying aircraft but... Each time I accumulate ~$40 million in the bank I start to think of buying one of the MD-83s I have leased. But then looking at the used aircraft market I see a couple of good deals on <10yr old aircraft and I bite, leaving me with little cash.