Buying and selling aircraft oddity?

[jamier]

I was looking round for newish aircraft to buy in History and The Future as 332 are coming harder and more expensive to find, I spotted 2 x 787's really cheap and checked the aircraft history, Why would someone purchase an aircraft for $342m just to sell for $146m 2 weeks later?

It seems a big disingenuous to do this and take a $400m loss across 2 aircraft when you're not actually going to use them or buying them specifically for someone as they're open for sale to anyone?

https://www.airwaysim.com/game/Aircraft/View/History/243163/

https://www.airwaysim.com/game/Aircraft/View/History/242994/

[DanDan]

Why would someone purchase an aircraft for $342m just to sell for $146m 2 weeks later?

from my experience:
1) erroneous purchases (happens to me sometimes that i have multiple tabs open and click the wrong one when purchasing)?
2) maybe the sales prices was planned differently as it wasnt adapted?
3) maybe instead of selling them off, the airline wants to actually offer them for lease only? (its not uncommon to offer planes for short-term lease below book value)
4) contact the airline and ask them - maybe they know why they do it. or if you want a good deal: buy the aircraft first!

[schlaf]

*sniff sniff*

Smells more like pure money tranfering... No body buys two very expansive aircraft by mistake....

[Amelie090904]

I personally think that the Sky Alliance is breaking the rules here. Just look at the airline "Buddy Holly" which used to be in Sky for many years. Now it isn't anymore (are they trying to hide their activities or claim that this airline isn't in Sky)?

Just look at it. Buddy Holly is selling his entire fleet at ridiculous prices. In this screenshot you can see cheap A330F sold by Buddy Holly while DanDan is selling the same aircraft at normal prices. The airline who bought those is St Pirans Airways if you want to see it for yourself.

From what I can see there are 2 seperate issues:

1) W Air is having massive losses and is selling aircraft at max possible prices to alliance mates who THEN either don't use those aircraft, put them up for sale or give them away for cheaper to yet another alliance mates.
2) Buddy Holly used to be in Sky Alliance (no more), is having trouble financially and is now functioning as some sort of "cheap aircraft source" and "aircraft dump" at the same time. This particular airline sells useable/young aircraft really cheaply while at the same time buying unpopular/not used aircraft at max prices while not using them. This means this airline is basically doing "direct money transfers". Airlines who don't need their planes or who need money just sell planes to this airline at ridiculous prices. At the same time, airlines with less money can get cheap planes from this source.

[MuzhikRB]

i also want brand new 332F for 40M

[Amelie090904]

Why scrap airplanes for 10m when you can just sell your old junk to Buddy Holly for 30m? Much more practical!

Buys 20 year old A321-100 for 35m.
Sells brandnew A330-200F for 40m.

Yes, that makes sense.

[jamier]

I'm not sure buying aircraft from manufacturer and then selling for cheap is against the rules as they're going to be used, however buying aircraft for max alliance and then not using them seems like it might be.

*edit

To clarify, if buddy has left the alliance and now buying from the alliance at the higher rate and selling at the lower rate then I agree that would be a breach of the rules.

The evidence is stacking up so much that Sami has to do something about it would be my guess.

[Amelie090904]

The rules clearly say:

"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)."

--> Buddy Holly bought 26 787 so far from W Air and DanDan for more than 350m each (max price after leaving the alliance), but isn't using them (0 landings). That's about 10b in "money transferred". Let's not forget the cheap sale of A330F and buying old scrap planes. In total there should even be more billions transferred/avoided.

"Alliance members must not try to circumvent these limits by for example leaving the alliance in order to be able to sell aircraft with lower/higher prices to the former alliance members."

--> Buddy Holly left the alliance to be able to buy/sell planes at lower/higher amounts to former alliance members (W Air, DanDan, YoYo, St Pirans).

I see 2 rules being broken here by Buddy Holly / Sky Alliance and it's not just 1 airline, but various Sky Alliance members participating.

[DanDan]

The rules clearly say:

"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)."

--> Buddy Holly bought 26 787 so far from W Air and DanDan for more than 350m each (max price after leaving the alliance), but isn't using them (0 landings). That's about 10b in "money transferred". Let's not forget the cheap sale of A330F and buying old scrap planes. In total there should even be more billions transferred/avoided.

"Alliance members must not try to circumvent these limits by for example leaving the alliance in order to be able to sell aircraft with lower/higher prices to the former alliance members."

--> Buddy Holly left the alliance to be able to buy/sell planes at lower/higher amounts to former alliance members (W Air, DanDan, YoYo, St Pirans).

I see 2 rules being broken here by Buddy Holly / Sky Alliance and it's not just 1 airline, but various Sky Alliance members participating.

not speaking for sky alliance, just for my airline:
- i have been notified by administration about my transactions with buddy holly. buddy holly has not been an alliance member for several years now.
- i am selling aircraft to BHA, as i have bought aircraft from BHA. BHA is also a major customer of my aircraft leasing services. neither sales nor purchases between our airlines have always been at lowest possible prices. noone requires two airlines to always use minimum or maximum pricing.

- the rules have been modified as of today in the morning, 10:40. especially the "legitimate use" highlighted has been added to the wording of the rules. see here for details: https://www.airwaysim.com/forum/index.php/topic,58865.0.html
- also i have added a feature request regarding "de facto alliance membership", since i know BHA was an alliance member, but one can not expect to keep track of every airlines alliance membership. because i thought alliance membership does stop with leaving the alliance - and to my knowledge BHA does not plan to return to the alliance. https://www.airwaysim.com/forum/index.php/topic,85068.0.html

about the case of intra-alliance purchases of aircraft for scrapping, i will best quote administration from 2017:

"To sum up some scenarios, for the future:

- Buy used aircraft for $10mil, use it for some years, then sell it to an alliance partner (or whomever) for $20mil - Just fine!

- Buy new aircraft from factory, and sell it immediately when delivered to you (at whatever the price is) - Fine!

- Buy one used aircraft from alliance partner and decide not to use it, and scrap it. - Fine, if it's only a single aircraft.

- Do the same for 20 aircraft in a row - Not fine.

- Buy an used aircraft from another airline at $10mil, sell it within a year back to the same airline for $20mil - Not fine, if done for many aircraft.

...any other scenarios?"

multiple further inquiries regarding the topic regarding other scenarious have been made and NOT been answered by the administration to clarify the rules at the time, but in my opinion, 2 is closer to 1 than to 20. there is a minimum and maximum alliance price for a reason. i personally do agree: i would prefer a "general market price", but if a b787 costs 330M from boeing - including waiting time - one should not complain if such an aircraft is sold on the UM for 342M (which is a ridiculous 3% express-premium). [also, just FYI: the max AP is -currently- at 360M, above the 350. the maxmax price is 401.]

[groundbum2]

makes me laff a certain especialty alliance getting huffy about rule bending 

[DanDan]

makes me laff a certain especialty alliance getting huffy about rule bending 

in english please?

[Mort]

in english please?

That was English.. 

[DanDan]

That was English.. 

good for an F or full of typos? sure...

but if you understand it, i would be glad if you could explain it.

[Tha_Ape]

https://www.airwaysim.com/forum/index.php/topic,85073.0.html

[Amelie090904]

@groundbum: No idea what your post means.

@DanDan

Thank you very much for your answer! Regarding the rules, I know. I have copied the excerpt from the rules from that very same update that was published today. It says bought aircraft must be used and may not be scrapped/stored/idled. Those 26 787 have not been used since they were built/sold to Buddy Holly. That is pretty much a rule violation.

This issue gets especially "spicy" when we have a look at W Air (Sky Alliance) who has had major losses over the past few game years. Without the purchase of those 787 we would be bankrupt by now. So it's not only a question of "legitimate use of the aircraft" or not, but also "money transfer" (because without that money W Air would be long gone).

From what it looks like, Buddy Holly has lost interest in this particular game world. Let's assume he left the Sky Alliance because he has no interest in actively playing/expanding/modernizing his airline. However, he is still active as a buyer/seller (exclusively for Sky Alliance members). That would be perfectly fine if only the transactions were not that suspicious. Let me summarize:

1. Buys 26 787 from Sky Alliance members worth ~10 billion, but never uses them.
2. Buys old aircraft (~20 years) from Sky Alliance members for ~300% of scrap value, but does not use them.
3. Sells brandnew A330F for much below market value to Sky Alliance members.

I see here three main ideas:
1. Generate emergency funds for airlines in trouble (W Air) by buying off his 787 (no problem, but aircraft must have legitimate use!)
2. Generate funds for airlines by buying off their old aircraft which makes more money than scrapping (no problem, but aircraft must have legitimate use!)
3. Saving Sky Alliance airlines money by offering brandnew airplanes at minimum prices (no problem, but should be "alliance minimum"!)

To me it does not look like Buddy Holly left the alliance out of lost interest in the game. If he had lost interest, he would either simply declare bankrupcty and leave the game (and save credits) or just let his airline idle. But no, he is still present in the game and is actively involved in aircraft purchases/sales. So rather than lost interest I would think he left the alliances on purpose to offer his fellow alliance mates better prices on aircraft purchases/sales (which is forbidden).

In the end Sami must decide. But it certainly looks very suspicious.

[Cornishman]

Hi everyone, I can't speak for anyone else what they're doing, but need to clearly put forward my involvement here:
1.  Buddy Holly Airline announced a long while back that he was going to leave the game for his own personal reasons and so was going to wind down his airline, but not being in any hurry, he said he would leave the alliance for good in this GW and take his time then to sell off any of his planes that anyone asked for.
2. I requested A332F specifically as that is what I need for my airline. All was said to me is, I'll get his planes at minimum permitted value. I am not buying and selling on anything (that could be illegal). I only buy what I can use immediately.
3. I had no idea what planes would be available at what price and couldn't believe my luck when some of them (not all) started being listed at just over $40m.

So all I can say is that I believe everything I was doing is totally within permitted normal rules. I don't decide what the minimum permitted price value is for any aircraft, that is done by the system. Yes - I was wonderfully surprised some of them were so cheap - but tell me who would have objected?

I hope everyone can see my role here as clean. I have not sold a single plane in my airline's history let alone in this transaction so I'm not sure what is being said against me here?

Jack (St Pirans Airways)

[Sami]

Admin came aware of this possible issue yesterday and was investigating the matter already. This issue is for not public debate so the thread is locked. Always submit your concerns about possible rule violations in private instead to the public forum.

[Sami]

I'll post this here instead of the game sub-forum ...
(and as noted in my earlier posts, any concerns on rule issues shall be always made in private to the administration and to give enough time to investigate the matter)

---

Based on a report the administration has investigated aircraft trading within the "Sky Alliance" group in "History and the Future" game world. The a/c trading involves one former member of the alliance who has first left the alliance and then actively traded aircraft exclusively with other members of said alliance, before eventually closing down his airline.

The purpose of the investigation was to determine if game rules were broken in terms of disallowed aircraft trading. As you may remember trading aircraft just for the sake of moving money around isn't allowed (for example to breathe life into a dying airline). Some clarifications to the wordings of these rules were also made today but the basic rule itself hasn't changed but we hope that the today's rule clarifications will avoid these kinds of confusions in the future.

There are several airlines involved and the investigation was grouped between each two "airline pairs". The investigation is intentionally very broad and involves also airlines not specifically reported to me.

Buddy Holly Airline left Sky Alliance about two weeks ago real time, approx mid-2012 game time, announcing his upcoming withdrawal from this game world (and left the game 09-2014). Any aircraft trading done after is under scrutiny since an airline about to leave the game world has no purposeful intention to fly any aircraft he has bought.


- Pair 1 -
Buddy Holly Airline (BHA) & DanDan in the Desert (DDD)

There were 22 aircraft sold from DDD to BHA within the last 2 game years, of B787 type. The price of these was in the high end but nothing extraordinary compared to aircraft available from the manufacturer (after a queue).

This appears to have been a pre-arranged deal where DDD has been the aircraft supplier (broker), and BHA has acquired the aircraft according to their deal (despite of intention to close the airline). Aircraft brokering deals are normal and fully allowed. DDD is in good financial state and not in the need of cash either (and would probably have sold those a/c easily elsewhere too). No issues from the rule's point of view here.


- Pair 2 -
Buddy Holly Airline (BHA) &  St Pirans Airways (SJR)

BHA has sold several (42) A330F aircraft from BHA during the previous few years. These aircraft are in use with SJR, no problems here. Of these aircraft vast majority has been sold at a reasonable price, and there is no reason to suspect intentional wrongdoings. However 9 aircraft have been sold at a price unreasonably low compared to other aircraft transfers, aided by the situation that the seller left the alliance before the sale happened (lowering the system-set price limits).

According to the buyer this was not specifically discussed and he was happy to buy them at this price when offered at the market. For this I'll give the benefit of the doubt, but St Pirans Airways will be fined for the amount of $700m, roughly corresponding to the gains from these 9 aircraft in question. Do note that SJR is also in a good financial state and the aircraft purchases do not look like intentional money transfers.


- Pair 3-
Buddy Holly Airline (BHA) & YoYo Air (YYA)

BHA has purchased several (36) A320 series a/c from YYA after 2012. These are generally usable machines, albeit bit old (~20yo). There have also been a handful (15) of A330 airplanes in similar age range.

The price of these aircraft have been within the alliance price limits (roughly at least). Furthermore YoYo Air is in a VERY good financial shape and making operational profits constantly so there has been no need to actually transfer money to this airline. The motive behind this remains unclear since YYA could have scrapped the aircraft, put them into the public market for sale, stored them or anything since the money and cashflow were not an issue at any point.

The possible money gained by selling an A320 series a/c with ~35mil instead of scrapping it with ~15mil (x 35 airplanes) is tiny in the overall cash balance on YoYo air. Hence a firm slap to the wrist shall be issued on this case.


- Pair 4 -
W Air (WAJ) & Vision7 (VVV)

Two B787's have been traded by W Air and Vision7, where Vision7 has bought the aircraft but clearly did not have any usage for them since they've been sitting idle.

The purchase price of these aircraft was in the high end but nothing extraordinary compared to aircraft available from the manufacturer (after a queue). The player in question also informed that he was not familiar with the rule in this sense and has been now directed. Since this is a minor violation, no penalty actions are issued to Vision7. The player is now aware on the rules and should plan some use for these aircraft without delay...


- Pair 5 -
Buddy Holly Airline (BHA) & Aero Luz (ALZ)

There have been several A320 trades (ALZ being the buyer) recently, but all these are done with respectable prices and there isn't any suspicious activity here.


- Pair 6 -
Buddy Holly Airline (BHA) & W Air (WAJ)

BHA purchased 4 B787s from WAJ with no intention of operating them (months before airline closure). The price of the aircraft was again rather reasonable, nothing to be alarmed of. However the aircraft trading was done for the sole intention of transferring money to W Air, judging from the context. Hence W Air is given a fine of -20 CI pts and $700m. (n.b. BHA cannot be fined anymore of this infraction.)


- Pair 7 -
W Air (WAJ) & YoYo Air (YYA)

There have been several aircraft trades (YYA being the buyer) recently, but all these are done with respectable prices and there isn't any suspicious activity here.