Chapter 5 of 10
Fleet and money
Where aircraft come from and where the airline's money goes
An aircraft is the airline's main asset and its main expense. It wears out, it breaks, it physically sits at one specific airport, and it costs money even when it goes nowhere.
Getting an aircraft
- Buying new — expensive, but the airframe is yours with no monthly payment.
- Buying used — cheaper, with the hours and the wear included in the price.
- Leasing — roughly 0.75% of the aircraft value per month plus a three-month deposit up front. The fast way to build a fleet, but the bill arrives every month.
Miss a lease payment by more than two weeks and the aircraft is repossessed — and the deposit is not refunded.
An aircraft is always somewhere
You can only book a flight on an airframe that is physically at the departure airport. If it sits elsewhere, it needs a ferry flight first: an empty leg at the airline's expense, and it takes time.
Wear and breakage
- Hours wear the components down, and scheduled checks come due on those same hours.
- Hard landings and random failures leave defects, and clearing each one costs money.
- A critical defect, or condition below 25%, grounds the aircraft until it is put right.
Where money comes from and goes
- Flight revenue is tickets and cargo minus fuel, airport charges and handling. What is left goes to the airline account, and a share of the profit is paid to the pilot as a bonus.
- Costs are debited automatically: salaries every 30 days, lease instalments, repairs and checks, hub upkeep, loan payments.
- When cash runs short, Finance has a bank: a loan with equal weekly instalments. The limit depends on the value of owned aircraft and recent profit, so an all-leased airline gets almost nothing out of it.
The personal hangar
The hangar is your own fleet, separate from the airline: aircraft are bought with your own money, and charter flights on them pay you directly. Handy when you have no airline yet, or simply want to fly something of your own.