34 replies to this topic

[Shuan]

I have seen the old aircraft market is flooded in beta worlds after a certain period of time. I have a new idea regarding sale and purchase of used aircrafts.

First of all the lessers should be given the name like ILFC,BOC etc. This will definately make the game more realistic. Just simply add all the leasing companies name in a dropdown list from where an airline could choose a lessor from whom it will buy the aircraft,add it above the time period of lease. After the lease expire the aircrafts would return to the lessor. When the aircraft have crossed 30 years it would automatically be scraped from the lessor. This way there will not be over flooding of aircrafts. Moreover each lessor should have different +ve and -ve traits. Like(i) if leased from lessor A you cannot buy that aircraft,(ii) some lessor offer only limited aircrafts(iii) some provide extra discount on leasing a huge number of aircrafts, etc. etc.

Secondly those which are bought should have sell store,lease(currently planned) and scrap options. Airlines can directly sell to other airline or lease to other airline. If not they can sell to broker who will buy the aircraft at 20-30% less price than the plane value and only a limited number of aircrafts at a time.

This way one can buy/lease used planes from airline directly or from broker(who sells at higher price than the plane value) or from leasing companies. This will help to make the game more realistic and will also insure that huge amount of used planes are not brought at a time.

Fourth,this will also insure that one cannot sell a huge amount of aircraft at a time. One has the only option to store them for future sale which will incure only a small amount of cash for their maintanance or scrap them.

Fifth, there has to a note column for all aircrafts where we could provide details about the aircrafts like 40 leased from ILFC, phasing out, 30 under sale etc.

Sixth, like the historic details about the airline there should be details about retired fleet, how many were operated and notes for them like was the largest operater, 10 were leased etc.



Hope you like my ideas, some are suggested before but wanted to remind you again so that they are soon made available.
THANK YOU

Edited by Yuxi, 06 January 2012 - 09:17 PM.
Edited title, pinned for further discussion

[Pineair]

Can see where you are coming from however airline empires will never reflect the real world. Look at Air Brasil (R5) £1.5billion in the red and so many Boeing 777-300Er's on order it will take another 35 years to deliver them and the game only has 17 years to run. This is crazy. They will drop out soon but presumably the ordered aircraft will still come onto the market.

The problem is a good number of players find the game easy while far more struggle and give up after a short time.

[sviridovt]

well, the game gets rid of old aircraft on sale if they are not bought within certain period. second of all, I do agree with the idea of leasing companies, but people would go for the cheapest one usually, so have the leasing companies be based on length of contract (so leasing company A allows leasing for a minimum of 1 year and is the most expensive, company B is from 5 years and is the middle one, and company C allows leasing from 10 years and is the cheapest or something along those lines).

[Shuan]

What like leasing companies that offer airplanes at less price will offer much limited aircrafts or they offer only turboprops and other regional aircrafts. By this people will not mainly choose this company always. Leasing companies will have both merits and demerits in them.

[Shuan]

Here is some proposed list:-

1) Leasing company A offers huge discounts on purchase of big order, but can be only leased for a max period of 10-16 years.

2) Leasing company B offers aircrafts at less price than the original market price but only sells turboprops.

3) Leasing company C offers aircrafts which can also be brought from them but offer them at price above than the market price.

You can provide more ideas...

I am sure this will reduce the number of aircrafts with one person as he will not able to buy all of the leased aircrafts as people including me do. People will them prefer to buy new aircrafts than leasing a big bunch of aircrafts.

I forgot to mention about the starting leased aircraft, where it will go after the lease period is over. They will return to their respective manufacturers who will provide these used aircrafts after a period of 2-3 months and at price somewhat 5-6% higher than the market value. This will ensure that people who start an airline only to provide aircrafts to their main airline is stopped. Moreover there is aircrafts flooded in the market in tne month of Feb in the starting year, these aircrafts should come to the market at random dates, like 10-15 on 1st Feb, then after a gap of 5 days and after a gap of 2-3 days and so on...

[Yuxi]

This will ensure that people who start an airline only to provide aircrafts to their main airline is stopped. Moreover there is aircrafts flooded in the market in tne month of Feb in the starting year, these aircrafts should come to the market at random dates, like 10-15 on 1st Feb, then after a gap of 5 days and after a gap of 2-3 days and so on...

In recent games, the aircraft on the market prior to February of the starting year have been removed prior to the game hitting Feb 1.

For the people who start duplicate airlines just to dump more aircraft on the market, we're working out how to handle the starting aircraft. Maybe in the future there won't be preset starting aircraft at all.

The idea with different leasing companies will have to wait until the next major version of AE, so keep fleshing out the ideas.

[Alistasia]

I really like some of the ideas that have been put forward here. Here are some of my suggestions:

• In my opinion older aircraft that are on the market shouldn't be automatically scrapped. Instead their values should drop dramatically once they reach 30 years old (due to their operating costs increasing aswell as their age). This will be of great benefit to smaller airlines aswell as airlines who don't have any competition on various routes that they operate and therefore won't be competing against more efficient aircraft.
• As already stated different lessors should have different names and logos.
• Airlines should always have the option to buy the leased aircraft when its lease term expires. In reality airlines have several opportunities to buy the aircraft at various times before the leasing term is up. For Example: on a 15 year lease of an aircraft, if the airline wants to end the lease they are given the opportunity to buy the aircraft or terminate the lease at years 3, 6, 9 and 12. At year 15 the airline can buy the aircraft or negotiate a new lease at a significantly lower rate.
• Different lessors should have different business models (more to come below).
• Airlines should be able to dry-lease (aircraft only) out older aircraft (lets say the aircraft must be at least 10 years old so that the airline doesn't become a full time lessor/speculator) to other airlines. Maybe there should be a rule that the lease rates from other airlines can't be less than 80% of the market value lease rate (hope this makes sense).
• Airlines should also be able to do wet-leases (Aircraft + Crew + Maintenance) to other airlines.

Here is some proposed list:-

1) Leasing company A offers huge discounts on purchase of big order, but can be only leased for a max period of 10-16 years.

2) Leasing company B offers aircrafts at less price than the original market price but only sells turboprops.

3) Leasing company C offers aircrafts which can also be brought from them but offer them at price above than the market price.

I like that idea. Some additional ideas which can be expanded upon:

• Lessor D specialises in startup airlines or airlines with low credit ratings.
• Lessor E is the leasing arm of one of the engine manufacturers and only leases aircraft that are fitted with this company's engines. In the real world GECAS (General Electric Capital Aviation Service) only leases out aircraft with GE or CFM engines (CFM is 1/2 owned by GE).
• Lessor F specialise in one specific aircraft type (Boeing 737s for this example)
• Lessor G only works with legacy airlines or airlines that have been established for 5 years or more.
• Lessor H is based in Hong Kong and only leases out aircraft to airlines based in the Asia-Pacific region.
• Lessor I is primarily associated with airlines whose business model cycles through aircraft very quickly: the maximum leasing term is 6 years after which the aircraft are sold to the used market.

Thats all my thoughts for the moment

[Shuan]

Really great ideas.

[Delta787]

For the people who start duplicate airlines just to dump more aircraft on the market, we're working out how to handle the starting aircraft. Maybe in the future there won't be preset starting aircraft at all.

Okay, I like the idea of not having a preset starting aircraft. Most airlines are not just handed a aircraft and say, "Here you go, nice fresh plane now go make money." No, I like the idea of getting your own plane to start with. One question, would the starting cash be increased? Just a thought.

[Yuxi]

Okay, I like the idea of not having a preset starting aircraft. Most airlines are not just handed a aircraft and say, "Here you go, nice fresh plane now go make money." No, I like the idea of getting your own plane to start with. One question, would the starting cash be increased? Just a thought.

The starting cash is enough to lease several used aircraft (727, 737, etc) so I think it's enough.

[sviridovt]

I like the idea of starting price increasing if you dont get starting plane though

Also I think in that case the first ac should deliver instantly.

[Yuxi]

I like the idea of starting price increasing if you dont get starting plane though

With the current starting cash, I was able to start an airline halfway through R2 and lease 8 used 727s on day 1. If you want everyone to have 100 aircraft by the end of the first year, this is a good way to do it

[sviridovt]

With the current starting cash, I was able to start an airline halfway through R2 and lease 8 used 727s on day 1. If you want everyone to have 100 aircraft by the end of the first year, this is a good way to do it

But in the beginning you can only lease 3 planes of its type

[craigdwatson]

I agree with yuxi on this topic.....

Remember, you can get finance bonds to increase your starting cash, and the chosen starting aircraft lease fee is taken away from your starting cash to which there is plenty of options for.

[Yuxi]

On an asside, i Think we still need old planes on the market after they are fairly obsolete, after all, there's quite a few DC-9s, 737-200s and even some 727s looking for a home in real life..

Those DC-9s are on the market because airlines put them there. In a world starting in the 60s/70s, you'll probably see some of those aircraft trickling onto the market in later years.

[berubium]

I don't think that the starting cash needs to be increased, but it would be nice if no starting plane was an option. If you start an airline & one of the starting plane choices doesn't fit in with your overall plan, you have to eat a significant cost of terminating the lease right off the bat. Either that, pay a significant amount of maintenance for a single plane in a different plane type than the others that you operate.

[Spanish David]

I don't think that the starting cash needs to be increased, but it would be nice if no starting plane was an option. If you start an airline & one of the starting plane choices doesn't fit in with your overall plan, you have to eat a significant cost of terminating the lease right off the bat. Either that, pay a significant amount of maintenance for a single plane in a different plane type than the others that you operate.

I think that more cash would just mean faster growing... which is what most are against i guess

[Obelix]

Since starting aircraft and starting cash has also been covered in this topic I’m going to begin there. Starting cash should remain the same however starting aircraft could be any aircraft available at the time of starting the airline, instead of a fixed list of aircraft, giving the chance to research them and select engine type. Once the starting aircraft is selected it’s delivered immediately. This would allow airlines that start late in a game to be in an even level playing field by having access to newer and more profitable aircraft from the start.

Now on to leasing companies, here’s a Wikipedia article about Aircraft Finance http://en.wikipedia....ircraft_finance that looks useful. For AE purposes we could use cash purchase, direct lending, operating leasing and finance leasing.

Cash purchase is pretty straight forward 50% on order and 50% on delivery.

With direct lending, airlines in good financial standing may choose to finance their aircraft purchase by paying 10 to 20% of the aircraft value and pay the rest in 10 to 12 years. When and airline chooses to finance an aircraft, the interest rate is calculated based on the credit rating of the airline at the time of the loan and remains the same for the duration of the loan and an amortization schedule (http://en.wikipedia....zation_schedule) is created to determine the monthly payment, the amount of principal being paid, the interest expense and the balance owed.

A note on purchasing aircraft is that airlines have the benefit of using depreciation as a non cash expense to reduce tax payments. Commercial aircraft are depreciated during a period of 7 to 12 years either accelerated or in a straight line, for AE straight line is easier to implement (http://en.wikipedia....ki/Depreciation). After the depreciation period ends you no longer get the tax benefit. Here come into play two different aircraft values. The fair market value (just like the market value we use now and that could also include hours flown, number of cycles, overhauls, maintenance level, etc.) and the book value which is original cost less the accumulated depreciation. When selling an aircraft if the selling price is higher than the book value then you have capital gains which are considered income and have to pay taxes on that income.

Financing an aircraft purchase is useful to take advantage of the tax benefits of depreciation and also opens the market for airlines to become finance leasing companies. For airline valuation purposes the value of financed aircraft is the fair market value less the balance owed.

The current leasing model would become the Operating Leasing where the system is the Commercial Aircraft Sales and Leasing (CASL) company offering leases up to 10 years at fair market value and Airlines would have the option to become Finance Leasing companies which can offer leases for longer periods of time at fair market price or at a discount. To calculate the fair market leasing price the AAA interest rate plus 2 or 3% could be used as profit.

In order to lease aircraft the airline would have to own the aircraft either paid in cash or financed.

As far as making the used market less flooded here are some ideas:
Owned aircraft can be sold either to the system (broker) which charges 30% of fair market value for commission and processing charges or directly to the used market.
When an aircraft is sold to a broker, the airline is paid at the time of the transaction and the broker then places the aircraft for sale at fair market value.
Just like now the broker would place used aircraft in the market randomly and the aircraft would remain in the market for 6 months and then be scrapped.
When an aircraft is sold directly in the used market the airline has the option to set the sale price at fair market value or at a discount but the airline only receives payment when the aircraft is sold.
Aircraft sold directly by airlines remain in the market until sold or removed from the market.
The lease early termination fee is credited to the airline in case of Finance Leasing and is considered income.
Failing to pay a loan for 6 months terminates the loan and the aircraft is repossessed
Airlines may place aircraft in the used market for sale only, lease only or both.
When selling an aircraft that has a balance owing on a loan said balance is automatically paid and the airline receives the difference

Sorry for the long post, if something else comes to mind I’ll add it later.

[n.x.w.m]

I Think the First plane should deliver instantly, or you get more starting money, but i don't think you should get both

But then you could just order then one at a time, and then they all come....

[ar157]

What?
Assuming you mean "You could just order more than one at a time", i clearly stated "First plane" so if i place an order for 3 DC-9s, the first DC-9 is delivered instantly, the other two will be delivered later.

I think nxwm means that if you say wanted to order 3 DC-9s you could just order it in 3 batches because the 1st plane comes instantly.... unless you meant the very VERY first aircraft you order in your airline comes instantly.