AsiaticAir.in : Ales Airlines Final Report on Aircraft purchase

Report by Srishti Malkotia Director Cargo

We will be ordering about 2 Freighters Boeing 777(freighter) and other cargo operation can be conducted in the bellies of passenger flights. Number of passenger flights required will be 6-7. The fleet will consist of Airbus 300/330/340, Boeing 747 (2), A320 (2). We initially will be ordering 2 A320, 2 Boeing 747 and 1 freighter and further expand the fleet. Current orders will cost us 977.7 million dollars.

Report by Jeevitha Sugumar Director Marketing

Number of Aircrafts required to buy for our Ales Airlines

Acquiring an aircraft for a startup starts with what type of aircraft will work for your intended routes and payloads. For instance there were hundreds of 727 freighters that were taken out of service by FedEx and others in order to switch to 757s. The 757s were acquired from companies such as United who had purchased them new and used them for decades but found it was worthwhile to improve their passenger carrying fleet. The 757 was designed in the mid 1970s to replace the 727 fleet. The 757 could carry more payload and do the work of the 727s with one fewer engine and one fewer cockpit crew member. So you can see how inventories of aircraft are moved according to the value in service. At one time there were airports full of relatively new 50 seat CRJs that were being dumped for very little money because that experiment did not work well for the big players and they simply wanted them gone.

Key items to consider are route payload applicability, fuel burn rate, maintenance history ie where is the aircraft with regard to large maintenance B check, C check, individual engine condition and history, applicable Airworthiness Directives, and time and age limits which may affect registration options. The knowledge required to do a proper purchase inspection is key to keeping a used buyer out of big trouble. Also replacement parts “rotables” are useful to understand and manage including a method to keep an engine available. The APU is another item to think about. There are companies who lease APUs by the hour (power by the hour). For short hops brakes become an issue to manage.

Experienced players know the tricks to save massive amounts of money. As a first time buyer paying for an experienced fleet manager will pay back money instantly. It is common to be able to save hundreds of thousands to millions of dollars using experienced managers.

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Airlines is a high cash-burn business.

You spend Rs 2.5 lakh an hour to fly an Airbus A320.

To fly it for 10 hours a day, you need Rs 8 crore.

If you have six aircraft — airlines need to bring in six aircraft within year of starting operations — you will burn Rs 90 lakh a day or Rs 27 crore in a month.

So, We need have at least 5 to 15 Aircrafts in order to run less than or equal to the other Airlines, but not worst. And we can expand or enhance Once we get the Capital profit.

Sonali Raikar