Terminals - Advantages and Disadvantages

[SJames]

Well I'm at that stage of thinking whether or not it is worth building a terminal at my airline's first hub. I take it once the terminal is built you can give back the rented gates and just keep the gates built at your terminal right?

If anyone has any tips or pointers, they'd be appreciated. Thanks 

[tushardhoot1]

From what I've heard, the only real advantage to a terminal is so you will have unlimited access to gates. This really only matters if you're based in a super duper busy airport. Disadvantages are obviously cost and the 1 returned gate.

[dktc]

Technically speaking, you need to figure out your current rate of return on investment. Then use that as your required rate of return. Then use that rate and the cash flow difference between the two scenarios (terminal or rent gates) to determine whether the investment could be justified.
{I guess if you understand what I am saying, you wouldn't be asking this question... so... oh well ...}

Anyway, two major points
- Build gates cost 75% monthly rent for upkeep, or in other words, you save 25% monthly by paying up front to build the gates.
- The maximum number of gates you could rent at any given airport is 25. If you need more than 25 gates at one airport, you have no choice but to build a terminal.