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Financial stability - charter prices

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Financial stability - charter prices

Old 23rd Mar 2012, 11:38
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Financial stability - charter prices

Am I the only one concerned or am I seeing this through a wrong perspective.
I know we are in a very competitive business but these low charter prices, non profit making can't go on forever. As demand seems to be increasing and fuel prices isn't it time for operators to start raising the prices for charter flights?
Triple Alpha, Solid aiR, Air Four, etc, all went under, though for different reasons, they had one thing in common - low prices.
How long will it take for more companies to say they had enough of the loss making and quit the business? Ho long will it take for further pilots to lose their job.
It's just not a sustainable situation. Everyone should be in this business to make €€€... get a grip
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Old 23rd Mar 2012, 11:51
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Hey Preacher man, looking at the fifteen year past, charters have never made money for the owner.

Charter brokers, who have no capital investment make money, repair stations make money from increased use, pilots make salary, and FBO's sell more fuel.

But owners are left with "reducing fixed costs".

The only exception seems to be a few charter companies who have a huge volume of clients and therefore can keep their aircraft flying non-stop on the high margin trips.

It's always been this way. Enjoy the ride!

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Old 23rd Mar 2012, 14:42
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As more and more regulation and oversight does not equal improved safety maybe deregulation and intervention only on shown safety grounds will equal more attraction to end users and larger profit margins for the operators! Ie the old M Thatcher principal.
If we want to strangle the industry to death carry on with our present course!

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Old 23rd Mar 2012, 15:34
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If nothing else it demonstrates its an evolutionary and not revolutionary business, its survival of the fittest and the suited business plan types who only make sense during the boom times fall by the wayside when things get tough.

The boom times are never long enough for the newco's to get truly established and the old sweats just take the boom times as an opportunity to stock up on Lion milk as they know whats around the corner.

The Cull started in 2008.....when capacity decreases as is always does then prices and rates will firm up those surviving thus far will be the fittest and worthy of survival
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Old 27th Mar 2012, 12:24
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The owners of SolidAir mentioned above are now back in business under the ASL brand doing the same stupid thing against too low prices... So nope: some things never change...
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Old 28th Mar 2012, 09:28
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when capacity decreases as is always does then prices and rates will firm up those surviving thus far will be the fittest and worthy of survival
whilst I don´t think your basically wrong, there is a big part of the equation left out here: the owner renting the airplane to the operator willing to take negative figures on the balance sheet for how long and how high, also how good (some) operator hide a tsunami of costs that comes down on an aircraft owner every once in a while (HSI/Overhauls/etc). I have witnessed stunning things in my time in that respect.

So, I think
worthy of survival
is not necessarily true.
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