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Valutation and plane orders


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#1
greekdim

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One simple question: how valutation takes in consideration orders of new aircrafts? Lets say that I order an aircraft with a value of 150 mln so I have to pay immediately 75mln, what will be my valutation value until the aircraft will be delivered , +75mln or what? Thank you

#2
the DOC

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no it stays the same because you technically own half the plane and when it is delivered and you pay the balance you own the whole plane so your valuation stays the same



#3
Yuxi

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In AE, your airline's valuation = cash + value of owned aircraft + value of unfulfilled aircraft deposits + cost of terminal buildings. 

 

Leasing aircraft decreases your valuation because the lease payments are counted as an expense.

 

When you order (buy) new aircraft, your valuation does not change initially because you're exchanging cash for the value of aircraft deposits. However, depending on how much of a discount you obtained when ordering aircraft in batches, as each aircraft is delivered your valuation may increase because the delivered aircraft's value may be greater than the amount you paid to buy the aircraft. The total effect of this valuation difference takes effect slowly as your batch aircraft order is fulfilled over time. In other words, this valuation increase does not fully materialize until the entire order is delivered.

 

When you buy used aircraft, your valuation can increase if the aircraft's value is greater than the purchase cost. This difference can be seen immediately, since unlike buying new aircraft, the used aircraft comes under your possession instantly.



#4
greekdim

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Thank you for your responses. Now it is clear.




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