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How are Investment helpful?


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#1
Azhar

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Can anyone please guide me how are investment helpful?

Egs purchase of an aircraft or bulding a terminal.



#2
TNT88

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If you leased and aircraft you lose money to pay for the leasing fee

if you bought it however, the value of your company wouldn't decreased

lets do some math:

 

- You have $500,000,000 and you leased 10 aircrafts for $100,000,000 then your company would have $400,000,000 in cash.

  But because the other $100,000,000 goes to the leasing company. Your company would only worth $400,000,000.

 

- You have $500,000,000 and you buy 2 aircrafts for  $100,000,000 then you would be left with $400,000,000 in cash.

  But your company would still worth $500,000,000 because you have $400,000,000 in cash and 2 airplane valued $100,000,000.

 

the buildings, you can't leased them, so you would lose some cash building it, but your company worth would still be the same.



#3
mxax-ai

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And you don't have to extend the leases all the time.



#4
TNT88

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And you don't have to extend the leases all the time.

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#5
Amtran

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Not to mention. if you own all your planes, you save yourself the cost of leases in the long term.


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#6
Shaq

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When beginning the airline, it is better to lease, so that you can expand faster.

But when you have a lot of cash, it is better to buy the aicraft because depreciation costs are wayy lower than leasing costs.






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