Hey! So I have 16 McDonnell Douglas Planes, around 200 passenger capacity, $300,000 AS down payment. I am only paying $15,000 AS per week to installments, but I notice some airlines are paying in leasing costs upwards of $200,000 weekly. How do these planes of other companies make money? I can never fill the planes enough to make a profit to afford this, so I'm just curious.
Hi,
every plane that is fully booked will make a nice profit.
If you cannot fill up a MD80, use a smaller plane. Or install bigger seats and ask more money for your tickets.
Three daily 1500km flights are more profitable than five 900km flights.
My 739's (more or less similar in capacity) make a weekly profit between 500.000 and 900.000 dollar, depending on seat load and routes. So paying a weekly lease of 300.000 dollar is not a problem.
You pay very little money in weekly lease, but your maintenance bill is probably much higher. And they tend to burn more fuel.
Don't use slim line seats. On a short 500km route, you can only ask (let's say) 50 dollar for a ticket if you use crappy seats. Eleven dollar goes to passenger handling, another 10 dollar (maybe less) goes to on-board service, there's the landing fees. And the rest goes to fuel, maintenance and salaries. Not much profit left.
Cheers,
Jan
Alvin, as said before…DO NOT buy aircraft! If you check other airlines you will notice that very few have more than 5% of their fleet owned. You have 100% of your aircraft owned. With a 10mil budget that means for 16 aircraft you have purchased on credit. This means every week you are paying not only an instalment of around 20,000 Per aircraft you will be paying roughly another 120,000 in interest. If you lease your aircraft you would only be paying 20,000 per week, per aircraft
Yeah, buying planes in the beginning is fairly stupid. But filling planes isn't hard. I have 60 A380s which cost 1 million per week and they still make money. That is 60 million per week just paying leasing for A380s.