4
« on: April 16, 2009, 09:40:11 pm »
Hello All...
Im operating out of Philadelphia (PHL) and Im looking to expand my base to Kansas City (MCI).
I have two questions: Is this the time to do it and how exactly do I go about expanding?
As for how, do I have to buy 4 gates at MCI, then create a base at 60x the gate cost? Or do I just create a base without the 4 gate purchase? Also, how do I ensure that aircraft I purchase start at MCI so I dont have to fly them from PHL?
As for the timing issue. Operating out of PHL I work to most of the Northeast as well as Canada, along with a few routes to major Midwest and Southeast US cities. However, I only own 4% of PHLs market share, but mostly because my main competitor operates at 3 to 6 route frequencies, while I maximize profit at 1 freq with 100% load capacity. He has undercut me a few times, but it isn't an issue at all. Aside from him, there is no real domestic threat from Philadelphia, as most operate from New York City's La Guardia or JFK. My DOC is just under 900k and I have 8 aircraft in service, ranging from short range CBY-3s and CM-100s to DC-3 and DC-5s.
I have been saving, anticipating the cost of purchasing 4 aircraft to operate at MCI, 4 gates at MCI, and the 60x base fee, (all of which I figure to be 21 million total), and so far I have 12.5 in the bank. Should I continue to expand services at PHL? My future plans include operating bases out of Houston and LAX as well, but those plans are well off. I figure MCI gives me access to the entire nation, which is why Im moving so early on the city. Should I wait? Or is this a good time to move?
Thanks...