AirwaySim

Ok, trying to understand another line item:

Cash Flow Statement ->
Capital expenditures (fixed assets) ->
Aircraft lease fees

This item appeared for the first time when I leased a new aircraft.  How is this item treated?  It looks like it is going to be treated differently from

Aircraft lease prepayments

My payment for the new leased aircraft was split between these 2 categories.  Anybody knows how these Aircraft lease fees are treated?

Edit: it looks like it is treated as an expense...  Why is this expense only on newly leased aircraft and not on aircraft leased from Used Market?

https://www.airwaysim.com/game/Manual/Office/Accounting/#Expense

QuoteAircraft lease fees (These fees are paid when an airline cancels an aircraft lease prior to its expiration. This line also includes the non-refundable portion of new aircraft lease's prepayment (5 month's leases prepaid, together with a sum equalling 1 month's lease as a non-refundable delivery fee).

Quote(5 month's leases prepaid, together with a sum equalling 1 month's lease as a non-refundable delivery fee).

Why stack the deck in favor of leasing used aircraft vs. leasing new aircraft?  It should be the other way around.  If someone is leasing, on minimum 5 year lease a new aircraft, I could see the lessor not charging non-refundable delivery fee, vs. 1 year lease from the used market.  At minimum, the treatment should be equal.

That is in addition to stacking the deck in favor of leasing vs. buying (because of incredibly low lease rate to deadbeat airlines)

Example:

A deadbeat airline with credit rating in CCC and below leasing a $60m aircraft.  Here are 3 scenarios with their costs:
- lease from UM at ~$700k per month
- buy with unsecured loan at 20% interest rate, with cost of $1m per month interest + bank fees + principal
- buy with secured loan at 10% interest rate, with cost of $600k per month + bank fees + principal

IMO, lease rates (especially for deadbeat airlines) should be higher, much closer to $1m than $600k (in example above), or the interest margin between cost of borrowing vs. interest on deposit should be reduced.

We really have 2 interest margins here, unnecessarily.  Right now, Game 3, it is 7%.  8.5% borrowing, 1.5% on deposit.
In addition, we have the real margin, based on the creditworthiness of the borrower (airline).  This margin (credit rating based margin) is doing its job just fine, as is.  Why do we need additional one?

I suggest that the 7% margin is scrapped, or reduced down to no more than 1%.  Doing this would, in a different way, address the overwhelming advantage that the leasing (vs. borrowing and buying) of aircraft.

Using the bank / credit markets to raise funds, purchase aircraft should be a viable option for the game.  Right now, it is not a viable option in the game, for 2 reasons:
1. the unnecessary 7% margin
2. cap on credit availability