It’s time for a serious convo about sale leasebacks and cash transfers

[swiftus27]

It's getting absurd that there's obvious trading of money going on within the games.  I have reached out to many of the players who have mentioned they would stop.  Instead it continues. 

Plane built in 1996 is bought by X for $52 million in 2003
Sold to alliance mate Y for $158 million in 2008.
Plane still listed for sale months later by Y but X still doesn't have the money to lease it back.  Y does NOT use the fleet type. 
Meanwhile there are 25+ similar 330-300s on the UM for significantly less money. 

I ask:  if this was done honestly, why didn't X just scrap the bird and have Y acquire a much cheaper one from the UM to lease to X?   You know what the answer really is.   Sadly it's because it's about transferring money between the airlines within an alliance. 

I abhor this practice among all alliances/players.   This is why I put the satirical press release

[swiftus27]

Here's an example.  There are many

[Bradley B]

But it is absolutely fine for you to send abusive messages to members who you claim to be completing 'illegal' activities right?





*Please note - contents of these messages have been covered solely to highlight derogatory language, no altering of the text has taken place.

[Bradley B]

Whilst at the same time being fully aware that members of your own alliance, one of the moderators to be precise, is doing the very process, that you claim to find abhorrent and hate, on a scale of 150+ planes?

[Bradley B]

Glass houses and stones comes to mind...

[groundbum2]

I'll get the popcorn...

[swiftus27]

Wow. 

I deleted names.   I didn't include anyone.   Someone wants this to be a fight.  I will not indulge in that.

I will just post the screenshot about one of a list of airplanes I asked this fight-provoker about.   This transaction WAS reported.  There was just nothing done about it.  Sami is a pilot and can't police this game non-stop. 

This is another reason this conversation NEEDS to be had.  This is from over 8 game years ago for those outside the HATF game.  This is one of at least 4 seen.   Essentially a $400m transfer of cash.   

I mentioned to Bradley that I'd talk with Andre.   If you re-read my post, I said I hate this practice among all alliances.   I mentioned ALL for a reason.

[Aero]

It's getting absurd that there's obvious trading of money going on within the games.  I have reached out to many of the players who have mentioned they would stop.  Instead it continues. 

Plane built in 1996 is bought by X for $52 million in 2003
Sold to alliance mate Y for $158 million in 2008.
Plane still listed for sale months later by Y but X still doesn't have the money to lease it back.  Y does NOT use the fleet type. 
Meanwhile there are 25+ similar 330-300s on the UM for significantly less money. 

I ask:  if this was done honestly, why didn't X just scrap the bird and have Y acquire a much cheaper one from the UM to lease to X?   You know what the answer really is.   Sadly it's because it's about transferring money between the airlines within an alliance. 

I abhor this practice among all alliances/players.   This is why I put the satirical press release

Inside your alliance Arrowhead buy the planes of W air which makes heavy losses and then Arrowhead stores the planes.
A type  the B737-300 already replaced by Arrowhead for a newer version the B737-800.
All went to direct storage.
This is not 1 or 2 but over 100 planes.

Sky members don't want to be in a fight.
They receive PM messages while we just like to play a game.

Seems like when elite members have competition who are not be beaten in the game then personal quotes appear or pm's sended.
For example the post of 1 of your managing members about my airliner changed name?
That had nothing to do with the game to other then make fun out of me.

[swiftus27]

Another person is turning this into an inter alliance war.  I'm asking for this to end for all. 

I even made fun of you in my last press release subtly, Aero.   Not everyone has hundreds of 10 year old stored & unused dc 10s to use as a savings account. 

Thus thread will get locked if you don't start discussing seriously. 

[Amelie090904]

Inside your alliance Arrowhead buy the planes of W air which makes heavy losses and then Arrowhead stores the planes.
A type  the B737-300 already replaced by Arrowhead for a newer version the B737-800.
All went to direct storage.
This is not 1 or 2 but over 100 planes.

Sky members don't want to be in a fight.
They receive PM messages while we just like to play a game.

Seems like when elite members have competition who are not be beaten in the game then personal quotes appear or pm's sended.
For example the post of 1 of your managing members about my airliner changed name?
That had nothing to do with the game to other then make fun out of me.

Calm down. All of those 737-300s will be sold/leased to Desert Air (alliance member) at the same cost (which is book value by the way) once his local competitor Skruf is BK. He will need them to cover the then vacant demand. It is only a matter of a few quarters until the sale will take place. We have managed to make Skruf unprofitable through the last few years since Desert Air began operating out of Cairo. At the current rate, it should not take more than 1-2 years for him to have a complete monopoly, doubling his demand and thus fleet size. I am currently leasing out over 300 737s to him, with those ~150 being "in store" for future needs once his competitor is gone. Since Desert Air still is rather small with limited economic opportunities, ordering them himself is near impossible. What better way is there than helping a struggling alliance member and making use of cheap/old planes by leasing them out to a much younger/newer member? If this is against the rules, I wonder why we have alliances in the game.

It is not a fraudulent money transfer scheme (buying a plane expensively and selling/leasing it back cheaply as some other alliance is doing it), but regular alliance business that is in line with AWS rules.

[swiftus27]

No one is noticing they were also bought for book..... to be sold for book....

[Binary11]

To be fair it is about time we discussed what should and should not be allowed.

To sell A/c for Book or UM value whichever is the lowest. is ok in my eyes.

Buying A/c for 50mill and selling them on for 150mill 7-8yrs later when your about to go pop because you have lowered your prices and not hedged fuel correctly is not a reasonable way to play the game. Its not reasonable that one player should play against what is inevitably two players.

Unfortunately part of the game is that from time to time you will make mistakes and go bust.


We all need to think about what tweaks could be made to the rules as no one wants to play a game that makes them annoyed because people don't play fair.


Personally id like to see a vote on what rules people would like to see that way we will all have to accept them and will all understand what's allowed and what is not.

[Sami]

Okay...

I do agree that clarifications to the rules can be made and a discussion of them is always a good idea, and usually the best ideas come from the community. But that said, sale-leaseback deals are part of normal airline financing / operations, and they should not be disallowed, since the airline needs to convert his owned asset into cash and also continue operating the plane.

But I do not find it very good that already in the first few messages the thread was dragged into personal stuff, and talk about certain individual cases.

I have received a couple of reports of various cases during the last few days, and at least one is still pending investigation.

[Binary11]

I agree it should never become personal that's NOT the way to go.

Also I agree that sale and leaseback SHOULD be allowed, as that would happen, and does in real life. Thomsons was a good example although they eventually failed in some ways. What does need to be looked at, is buying an aircraft at 50mill then when your about to go bust because you have made a series of mistakes, to then sell that on for 3x its cost. That can only ever be seen as a cash transfer. If however the sale was done at either Book or UM value whichever is the lowest then that's fine as that would be the same as in RL. After all this is a "Simulation" and should simulate roughly what happens in the real world. If my point above happened in RL then both regulators and the Tax man would have a lot to say about it I'm sure. Its the same as the US subsidising Boeing and the EU with Airbus etc

However saying that, if the community here think that what's currently going on is ok, then that's fine as we would all know where we stand, and can all play to the same set of rules. Instead of one thinking they are right, and the other also thinking they are right. In essence what we need here is CLARITY

[Jake]

Just setting a limit on the price you can sell it for at 1.10 of bookvalue and this problem would be solved (that would however limit the earning potential of the bigger brokers, but that's something i personally could live with if it makes these discussions go away)

[Jetonski]

So... This unfortunately seems to be a situation that continues to unnecessarily frustrate people and I agree we should try to avoid that by somehow trying to set boundaries.

Having been on both sides of the story (yes, it feels quite unfair when there is continuous or structural trading between 2 airlines, especially when one of them is struggling / on the other hand yes, it is sometimes a logical consequence of being in an alliance and part of this would be practise in real world as well), we came to the conclusion no one wanted the negative energy coming out of this and we had a discussion on Where/How do we draw the line between 'a little help' and 'structural sponsorship?' in order to keep the game fun and fair for everyone involved.

One idea that came out of this, was to re-introduce alliance min/max prices for plane trading. (Anyone knows the reason why this disappeared some years ago? Did not see the reason here...) This automatically took out the extremes for everyone. I would not mind these come back and are set at market value +/- 10% maybe, or even a fixed market value average default...
Then people can trade as much as they want, but there can no longer be discussion or frustration about unfair pricing and/or gaining an unfair advantage from this practise...

[Binary11]

So... This unfortunately seems to be a situation that continues to unnecessarily frustrate people and I agree we should try to avoid that by somehow trying to set boundaries.

Having been on both sides of the story (yes, it feels quite unfair when there is continuous or structural trading between 2 airlines, especially when one of them is struggling / on the other hand yes, it is sometimes a logical consequence of being in an alliance and part of this would be practise in real world as well), we came to the conclusion no one wanted the negative energy coming out of this and we had a discussion on Where/How do we draw the line between 'a little help' and 'structural sponsorship?' in order to keep the game fun and fair for everyone involved.

One idea that came out of this, was to re-introduce alliance min/max prices for plane trading. (Anyone knows the reason why this disappeared some years ago? Did not see the reason here...) This automatically took out the extremes for everyone. I would not mind these come back and are set at market value +/- 10% maybe, or even a fixed market value average default...
Then people can trade as much as they want, but there can no longer be discussion or frustration about unfair pricing and/or gaining an unfair advantage from this practise...

To be fair I had also thought about something like this. However Market value wouldn't work. Part of being in an alliance is the ability for others to buy planes for you, especially new models that if paid for by cash upfront get 30% discount. I think thats fair as its not a cash transfer. We all agree that when your in an Alliance your mates help out when ever they can. However I would be in favour of limiting the maximum sale price. Also and ive said this in the Alliance forum that one way to discourage storage of planes is for the cost to rise each quarter the plane is in storage something along the lines of it doubles every quarter.

[swiftus27]

MV doesnt tend to work because I am buying A340s up to 150m below market in HATF.   I could EASILY turn around and "sell" them for max price.

Example from HATF:
https://www.airwaysim.com/game/Aircraft/View/History/169626/
1.81 year old A343E.
I just purchased for 72m from UM. 
Can sell for 225m at max price.
Minimum Market price is 131m.

What's to say I am not struggling and I have about 6 of these in my arsenal (and I easily have 50 like it).    I could easily make a billion from another player and could easily lease the plane back permanently. 

All of this would be legit. 

[Jetonski]

Ok, so then it looks like there is no 100% ideal solution and the only thing that can be done is to limit the Min & Max alliance price to avoid the extremes like it was before right?

Maybe other people having other ideas?

[tungstennedge]

I'll get the popcorn...

Munch munch munch mhmmmm.