PPRuNe Forums - View Single Post - Current A/C lease rates - Anyone?
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Old 23rd Feb 2003, 19:43
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Join Date: Nov 2002
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A problem with start-ups is that too many are attracted by the lease rate rather than the overall cost of operating and go for a totasly unsuitable type. Lease rates are only part of the monthly cost of the unit. $105k for a 757 may seem good realtive to a 737-300, but unless you can make use of the additional seats to cover to higher landing, en route, fuel, maintenance and cabin crew costs, the 737 may actually be better value for money. Assuming 200 hours per month flying, a 100k lease rate works out at $500 per hour for a very heavy aeroplane. $120k per month for a lighter 737 flying the same network comes out at just $100 per hour more expensive from a lease rate perspective, but then compare the other costs - 100 tonnes vs 65 tonnes for all landing and nav charges, bigger and more thirsty engines to liftl that extra weight, extra one or two CCMs for the extra seats etc etc and the actual cost of operation of the 757 per hour moves up significantly. This is exacerbated by using the heavier aircraft on sectors more suited for a smaller unit, where cycle and landing charges add up rapidly due to the shorter sector lengths.

Obvious question is will you be guaranteed to earn enough extra revenue from a 757 than a 737 to justify the extra costs, in particular can you make use of the additional 50/60 seats at a reasonable yield.

p.s. this post is not directed at www.FreshAer.com but, come to think of it, I assume they have done their math on the 757-200 on 40 minute sectors up against Ryan's 737-800's ....
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