PPRuNe Forums - View Single Post - OzJet flies into Victoria, from SA
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Old 2nd Aug 2005, 01:50
  #10 (permalink)  
pullock
 
Join Date: Oct 2002
Location: aus
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Tinpis, it depends on how much cheaper the -200 was than the -300.

Lets say a -200 costs $ 1 000 000 and a -300 costs $ 5 000 000, then apportioning a rule of thumb 10% (but I bet it's higher - I wouldn't invest in a risky venture like this at 10 %!!) capital cost the weekly costs just to have the aircraft are

-200 $1917
-300 $9615

If financing at an LVR of 50%, you would need the following clear equity in bricks and mortar assets.

-200 $ 2 000 000
-300 $ 10 000 000

It's far easier to spend cashflow on ongoing maintenance than it is to earn equity. Once, however, the cashflow builds to equity, it can be used to purchase newer aircraft !!

Also, examining the downside, if the business doesn't work, and the aircraft have to be sold at a loss, lets say for arguments sake 50%, then a -200 looses you $500K, whilst a -300 looses you $ 2 500 000.
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