Start Up Question: Lease or Credit?

Hello folks,

I am a newbie, and I've tried several times to survive in a world but none of them succeeded.

When you are given the start up money, which option would you choose? To lease or to credit aircrafts? Also, what are some good aircrafts to start with? Should you invest all your money getting aircrafts or be a little bit careful with your cash?

I appreciate your help.

Frustrated Newbie :(

Hi,

Quick answers as the pros and cons are all over the forums

- Lease aircraft

- Depends on your location, plans, routes etc. Generally Dash 8-400, Embraer 195 or Boeing 737-700 are favorites

- Save about 10% for your running costs until money starts coming in

Hope that helps

Ian

I’ll attempt to give you some basic pointers. Feel free to ask for clarification or more detailed information. Also if you can give us your server we may be able to better assist.

Leasing is nearly always the best way to obtain an aircraft. The primary reason is because it is the cheapest method. Purchasing an aircraft on credit will allow you to eventually own it outright, however the weekly cost is much higher than the lease rate. Overall not great for a starting company with $10mil.

As far as aircraft types are concerned: Used aircraft are often the best way to earn cash quickly but this also depends greatly on your business model and the size of the aircraft you want.

As a new company you can usually purchase leased, lightly used, Dash8 Q400 aircraft (depending on your server) but you need to find a good market for it. They are usually best for short haul routes.

If you are looking for something bigger/faster used 737 classics (300, 400, 500) are very cost effective and if they are available. There are many different types that are good so I wont list them all but those are a good place to start.

Also keep in mind that starting with long haul routes will be extremely difficult or impossible unless you are interlining with a very large company at your hub.

To answer your final question, when starting a new company I like to leave enough spare cash to cover the entire first week. Don’t forget that after aircraft purchase you also need to buy seats for them which will be automatically deducted from your account, so buying 9mil in new aircraft can cost you an additional million or more, which makes paying salaries at the end of the week very difficult. Use the financial schedule to see how much your salaries and leasing payments will be, and try to stay above that in the beginning.

Don't go too big to start with. Stay with aircraft that say they fit 90-130 or so passengers. Reason being, to compete you are going to need a few things to start with. One is good seats. A 737-600 has room for about 100-105 pretty good seats in an economy-business arrangement. Better seats will help a lot.

You can try used aircraft, but depending on the server you are playing on, they can be scarce and the competition for them can be high. Don't be frightened of leasing new planes. Pay attention to your costs, including the security deposit, and the weekly payment. Some used airplanes can cost more than a new one, and while the difference might not seem that large, like $100,000, when you first start out, that's a lot of money to be paying just because you want a plane right now instead of in 12-24 hours.

Do what the others said and keep about $1-$2 million in your bank through the first week.

And the biggest tip of all... expect to fail. It's not a big deal when your airline goes under. It will happen. Everyone here can pretty much attest to having started and failed a dozen or more times before getting the hang of it. There is a lot of information on the forums. While you're waiting on your planes to be delivered, start at the top of the Community Support forum and go as far as you can.

Also may I recommend Airlinesim Youtube tutorials ... while they talk about "how to"get started, they also talk some strategy

"Classic version" Airlinesim Tutorials

http://www.youtube.com/watch?v=7C3ytjQUWrw

"NextGen/enhanced" version Let's Play Airlinesim

http://www.youtube.com/watch?v=AX-IVU4SNOY

"MAX/NEO" version Let's Play Airlinesim Again

http://www.youtube.com/watch?v=mVrNHuqMTxo

These tutorials are not a single video, but rather a series of lessons, with total duration of several hours.

And to answer your original question about aircraft, if you are starting in a big market, 737 classic may be a good option, especially BGW version. Try not to get 737-500 HGW as they cost a lot to operate....almost as much as old old 737-200 Adv HK. 737-300 BGW of about 20 years of age is probably the best bet (if you can get it) - quite cheap to operate, and lease is very inexpensive. Avoid anything over 25 years of age, as maintenance will be much higher, while lease cost almost same as 20 y/o.

For regional jets, look into CRJ700/900/1000 and E190 family. CRJ is a bit cheaper to operate but it's a long thin tube :) so claustrophobic passengers will not want to fly your airline (just kidding). CRJ700 is much cheaper than E170/175, CRJ900 is a bit cheaper than E190, and CRJ1000 and E195 are roughly the same. If choosing E-jets, try to go for E195 because they have more seats and are only 100-300 AS$ more expensive per segment to operate than E190.

Do not be afraid of using better seats, with better seats you can charge more money ... so if your load factor is low, put in better seats and charge more.

If you are starting in a small market, you should start with Q400 on domestic routes, then slowly add international routes. Flightstats is a good guide to see what routes you can operate (as AS demand is in great part based on real life demand). After Q400, add some CRJs or E-jets. If you see your Ejets filling up, do not be afraid to add 737-300 (or 700). Try to avoid HGW versions for routes of less than 3000 km as they consume more fuel. Go for BGW. If you are on older servers (not Aspern) 737 classic (and MD80s) will be usually more available than used Airbus A320 family (in 15-20 y/o category). Do not go for 757-200 they are just too big and expensive to operate.

One more thing, a seat config for 737 can go from 100 to 150,000 AS$. As mentioned, plan for seats cost. Deactivate "automatically create and assign default seat configuration in game settings ... otherwise each aircraft you get will get some basic seats installed costing you $$$ and you will need to re-apply your desired seat config.

Oh wow it was just a short lunch break and I've got so many helpful tips! Thanks a lot! This community makes me feel a lot better.

I am trying to start in Aspern and focus on East Asia area. Is that a "small market" or a "big market"?

If you're talking China or Japan, that's big market. Not sure how saturated that is.

My suggestion: AS has announced that a new beginner's server is going to start in approximately 7 days. What I would do is create a company on one of the older servers, like Fornebu, Devau, or others, and look around for a market that you want to work on and learn. I've always thought the best way to start is to know your hub. Research the airport. Find where people fly to, where they fly from. Know the hub, know the country. Know the airports close by. This is best handled on an older server where people are not ready to outbid you on aircraft and snatch up every slot that comes free.

Check out the planes, fiddle around with cabin configurations, service profiles, and find something you like that works for you. When the new server comes around, jump in and start fresh with what you've learned. From all accounts, it's going to be a true beginner's server, with expanded resources and a limited time. That means you shouldn't have a problem in getting planes, slots, and learning about the system. The beginner's game server should last until they bring out another "real" game server, probably sometime close to the end of 2014. By that time, you should have a good base of knowledge to build off of.

It took me a number of restarts but I've now gone about two months, happily and profitably. The biggest thing is being patient- particularly when starting out you may need to let your airline just do its thing for a week or two. Keep enough money to be able to cover your week's expenses at all times, but try not to have much more (since there is no interest on your cash reserve, so it's better to spend money on an aircraft turning a profit than letting it just sit there looking good as a fat bank account).

Also the used aircraft market is your friend. Depending on what's on the market in your home world (Fornebu often seems to have heaps of Embraers available, but Dash 8-400s are like GOLD on the market), that may help you choose a start-up aircraft. Look at the 'fleet lists' to get an idea of some successful Business/Economy combinations. There seems to be fairly high Business cabin demand in the game worlds, and it can be wildly profitable.

Choose a market with domestic demand, it seems to be far easier (particularly if there is a capital and also some other large cities to fly to). But these are also likely to be the markets stuffed with competition. If you're keen to play a particular country, check out multiple game worlds first. Particularly on the older game worlds, some countries will be near impossible to start-up in as there is a very entrenched player and very few slots left (Russia, Japan and Portugal, for example, in Fornebu are pretty much off-limits to anyone new).

Embraer E170-E195 and the bigger CRJs also give you a fair bit of flexibility because of the pilot type ratings- the Sukhoi SSJ is often cheaper but you will be limited in capacity options.