keep small planes?

[zenmen5]

I don't know if I shoulds keep my small planes or sell them,like my starting nord aircraft and such,well?

[Zero-G]

as long as its making a profit and its not REALLY old 3+ years, keep it... I say untill your making so much money and ordering planes faster then you can build routes its not worth taking off line... keep growing and adding, why take one step back to remove a plane thats still profitable. chances are you still have plenty of places to fly with other planes.

when you start taking delivery of ten planes an hour, thats seemed to be my personal limit of route construction and wore out my fingers... then dump it over the side into the market.

or run out of productive routes, then switch/upgrade... Remember the bigger the plane is not always better.  with bigger planes come bigger maintance bills, and will eat your profits.

I don't know if I shoulds keep my small planes or sell them,like my starting nord aircraft and such,well?

[nwadeltaboy]

I don't know if I shoulds keep my small planes or sell them,like my starting nord aircraft and such,well?

I keep my starting aircraft just for sentimental purposes, and I usually keep the smaller planes and put them on less productive routes instead of getting rid of them

[LOT 737-300]

If you know you can overall make a profit with them, then I don't see why you should not keep them, though if they end up costing a lot more than they're making, then yeah, time to look for new planes (though typically new small planes, as putting larger planes on very small routes (i.e. Tu-104) will end up costing you badly.

[Viking_Air]

OK,
I'm a new started in W9 (Viking Air/VIK)... I'm surprised of the opposite, but please let me know if something wrong...
My Nord260 is flying from Oslo to small destinations quite colse (10 routes per day!) making a good (??) €160k... day profit

as I wanted to expand to a bit longer routes I leased a F27-200. This is flying 5,5 routes and bringing home €183k... day profit  
(both planes have flight time filled up!
I know that I rented less gates for those 5,5 legs... but that's all I can do it?

Next a/c I'm going to lease... well don't know if it would be better search for a N262 or a F27 or larger...?
can you suggest something?

Thanks
Marco
Viking Air

[Chavaquiah]

With the Fokker carrying over twice the passengers per trip, it should be more profitable than the Nord.

Look at it this way: for the same money you're paying for the F27 you could get at least two Nords. Assuming similar routes, two Nords would give you 2x€160K=€320K. A little bit more than F27's €183K, isn't it?

[Viking_Air]

Yes this is what I supposed to be...

The airspace in Norway in W9 is already congested and it is not easy to make big money,
with a 23 seat (with a reduced offer) you can get hi prices, but with the F27 I've to reduce them...

Should I enter the market with bigger planes than concurency?

[Chavaquiah]

Should I enter the market with bigger planes than concurency?

Until you become more powerful, that's not a very good idea. My recommendation, at least for the initial stages, is to use cheaper (and smaller) planes.

When you have a single base your fixed costs, in proportion to total revenue, are quite high. So it is important to expand fast. But, in order to do that, a stable income is necessary. Launching big planes against established competitors results, almost always, in them lowering their fares. This will hurt your profit badly.

But, most importantly, and from the Fokker vs Nord example above, you understand how cheaper planes bring a higher Return On Investment. Instead of waiting until you have enough money to buy a bigger plane (that'll bring no much higher profits), get as many smaller planes as possible, and get them making money as soon as possible.

[Viking_Air]

OK thanks

[Chavaquiah]

Sorry, forgot something. When previously I mentioned having enough money to buy an airplane, please do not assume that buying is always the best way to go.

Indeed, one of the advantages (not that there are many) of entering a world that's been running for some time is that there are plenty of planes on offer for leasing. Leasing is clearly the best way to get an airline growing fast. :wink:

[LOT 737-300]

That's rather flawed logic, other than the fact that the airline who is leasing out the plane gets to pay for maint, sometimes you'll end up paying more in leasing than the plane is worth in the end. Now for smaller aircraft, like IL-14M and Ps, as long as the rate is below 400K, it is great. Also, tons of N260s are on the market in world 9 even at this point, and being leased out at decent rates (last I checked.)

[XeniaAirways]

I don't know if I shoulds keep my small planes or sell them,like my starting nord aircraft and such,well?

I love the Nord 260 Super Broussard I had 12 at this aircraft's peak!
I am currently in the progress of changing to Fokker F27-200/Fokker F27-400/Convair 440s to replace the Nord 260 Super Broussard and my plans are not very clear, but I think I might be keeping around 5 of these aircraft (although I'll probably sell my current 2-year old fleet of 7 and replace them with newer Nord 260s...).

Nord 260 Super Broussard is cheap to buy, relatively fast for a turboprop (213 knots!), and has a quick turn time at 0.15.  It carries 23 passengers, which isn't bad for short-range flights.

[Viking_Air]

Yes is a really money maker... one of this is running at 183.000€ per day.... is it good?

/marco

[Chavaquiah]

That's rather flawed logic, other than the fact that the airline who is leasing out the plane gets to pay for maint, sometimes you'll end up paying more in leasing than the plane is worth in the end.

Have to disagree. The point is not how much you pay for the lease but how much you get from it. Let me try to explain with an example:

Plane model X costs €2,500,000 and you can lease it for €500,000 per month (very expensive, but so be it). It brings €50,000 operational profit per day. Assuming you have the required €2.5M, you can either buy one single aircraft or lease 5 of them. At the end of the month, your single a/c made you €1.2M. Not bad. Had you leased 5 a/c instead, you'll have 5 x 24 x €50K = €6M. After paying the rent (5 x €0.5M = €2.5M), you would still be richer to the tone of €3.5M (6 - 2.5).

In this example, leasing (even at an very expensive rate) would have been by far the best choice.

Now, I don't claim this to be always the case. When you move to more expensive planes, economics sure start to change.

Yes is a really money maker... one of this is running at 183.000€ per day.... is it good?

How good that is depends where you're operating from. But I must say I have planes that cost 30x more than that bringing me less profit. So... yeah, it sounds good to me!

[Zero-G]

You also neglected to mention the LEASED planes require no Maintance cost on your part!

That's rather flawed logic, other than the fact that the airline who is leasing out the plane gets to pay for maint, sometimes you'll end up paying more in leasing than the plane is worth in the end.

Have to disagree. The point is not how much you pay for the lease but how much you get from it. Let me try to explain with an example:

Plane model X costs €2,500,000 and you can lease it for €500,000 per month (very expensive, but so be it). It brings €50,000 operational profit per day. Assuming you have the required €2.5M, you can either buy one single aircraft or lease 5 of them. At the end of the month, your single a/c made you €1.2M. Not bad. Had you leased 5 a/c instead, you'll have 5 x 24 x €50K = €6M. After paying the rent (5 x €0.5M = €2.5M), you would still be richer to the tone of €3.5M (6 - 2.5).

In this example, leasing (even at an very expensive rate) would have been by far the best choice.

Now, I don't claim this to be always the case. When you move to more expensive planes, economics sure start to change.

Yes is a really money maker... one of this is running at 183.000€ per day.... is it good?

How good that is depends where you're operating from. But I must say I have planes that cost 30x more than that bringing me less profit. So... yeah, it sounds good to me!