PPRuNe Forums - View Single Post - First Embraer E190 for Cobham Aviation
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Old 7th Sep 2014, 07:08
  #32 (permalink)  
4dogs
 
Join Date: Jun 1999
Location: Australasia
Posts: 362
you get what you pay for

I've always been told that these mining contracts are so lean that you could never make money on them with the likes of an Eject.
If the cost of providing certain infrastructure, particularly where there are severe environmental constraints, outweighs the cost of running a particular type of aircraft, the contract will be written accordingly. The margin will still be skinny in the buyer's market that is FIFO.

If an E-jet was the preferred aircraft (which is rumoured to be the case), then Cobham would have to absorb the cost of adding the type to the AOC plus the inherent costs attributable to diseconomies of scale, a distinct competitive disadvantage compared with Virgin and Airnorth. Certainly, Airnorth would seem likely to benefit from the fleet addition and the attendant business expansion while having nowhere near the overheads of Cobham, so the floor must have been strewn with pencil shavings...

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