When Are They Going To Launch

[Cent]

Business:

a 19 seat twin turbopropeller costs (Variable + fixed costs) around 2000 US $ per hour.

Average booking must be more than 70 % so 14 passengers to share 80000 Thai Baths = 5714 Baths per passenger per one hour of flight. (Average speed 450/500 km/h)

Who is the generous donator who want to start a Business?

Asian Frog,

USD 2000 an hour? Is this cost to operate in the US, or Thailand? Where did you get these figures? Can you show a breakdown of the costs? Is this mostly fuel consumption? Landing fees? Taxes? I do know Phuket Air said they were making no money off their flights to the small cities. I couldn't figure it as the plane was usually full. When they stopped the flights they were charging around 1650 baht one way. (I would have paid more if they upped the price just for the convenience and time saved.) I can see fuel costs being high, especially now, but when Phuket Air was flying to Surin it was before the current surge in fuel prices. Just wondering. They seem to be able to fly up here during the Elephant Festival for a week or two.

Cent

[Asian Frog]

Details

- Fixed costs are covering depreciation, insurance and crew salary

- variable costs included fuel, maintenance and some other costs like "per diem" of crew, landing fees...But we will retain mainly Fuel and maintenance.

Aircraft productivity depends on a lot of factors, but the size is one important factor: if I can put a large airliner instead of a fleet of smaller ones my costs are drastically lower. There are also thresholds due to impact of regulations.

As a general rule I must have the correct aircraft on the correct leg. If I am overcapacity I will loose money, If I am obliged to increase the frequencies because my aircraft are too small my profit margin is reduced and my running costs are too high. Due to fixed costs, my fleet must work at least 5 to 6 hours per days as a bare minimum.

I will take the example of a small aircraft: the Beechcraft 90, The base is a business aircraft for 6 or 7 passengers, but an extended version of this aircraft, the Beechcraft 1900 can carry up to 19 passen, investments are slightly higher for the 1900 as is it fuel consumption. But overall, I share the cost per 19 passengers instead of 7, I divide my cost per 2. Now if I am able to introduce on this leg an ATR 72, because I have the demand, then my cost per passenger will be once more divided. And if I can introduce a wide body on this leg, I will be able to reduce the price drastically. But if I introduce a wide body when the demand correspond to a commuter, I loose.

A real example: Phuket- LANGKAWI

It is obvious that there is a demand between those 2 islands as a lot of yatch traffic is operating and a westerner communauty is moving from one spot to the other for visa renewals.

Few years ago, Malaysian airlines has operated the line with a B737 but has been in the losses and has given up.

If you study the "market" yes you have a peak in the high season which justify a B737, but most of the year, the traffic is around 20/30 passengers daily (if your price is acceptable)

If you introduce an aircraft of 19 capacity your costs are too high compared to boat + bus solution and to the fares you are able to propose with a B737 with a normal filling, you are also too slow. The advantage is estimated too slim per the customers. As a result, a lot of people are interested to open the line but nobody is doing because it is not obvious to run this line and to be in the black.

One last thing, fuel is an important accounting position, but the turboproller aircraft and the jet are running on JET A1, price is 27 Baths per liter currently in Thailand (-7% on International Flights). Maintenance costs are covering labour and spare parts. In US spare parts are less expansive than in Thailand, but labour is less in Thailand (And it is the main part of maintenance costs), we can estimate that the difference in the variable costs (also named "Direct Operating Costs") between Thailand and US is slim, the fuel price being balanced by maintenance labour prices.

To the direct Operating costs, you must not forget to add the fixed costs.

The DOC of a small commuter (19 seats) is around 1500 US $ but you have to add your fixed costs and your profit margin, you have to sell at more than 2000 US$

For a Thai administration, I have even make a simulation with a Diamond 42 between Bangkok and Nakhon Phanom. The Diamond 42 is a small 4 seater twin engine, end trainer, diesel engine. (consumption 44 litres of JET A1 per hour) Cruise Speed 150 kt.

I cannot compete with PB Air -Fare 3200 Baths on one way. But PB air must be nearly full to maintain the line. and 3200 T Baths one way makes 6400 for the round ticket, even for westerner it begins to be non negligible!!! (But PB AIR approach is very reasonable in regard of their costs). But obviously there is not the market to introduce a bigger aircraft, only way to reduce the fares.

It is too technical for most of people I am sorry

If you need expertise,....send me a PM

Edited June 3, 2006 by Asian Frog

[Asian Frog]

Please find this comparison of Aircraft costs (Maybe one year old)

Jet_Comparison_Charts___JetBrokers_Inc._www.jetbrokers.aero.pdf

[phibunmike]

It's almost assuredly caused by rounding error. It is very unlikely that the precise longitude and latitude would both end in zero seconds....unless somewhere the real value got rounded off to the nearest minute. If this is correct then the real location can be anywhere plus or minus 30 seconds from the location you have indicated in both the north-south and east-west directions. Does anyone know how far one second of longitude or latitude moves you on this planet? I'm kind of lazy today and don't want to exert the effort.

The comment about WGS84 is generally correct, but probably both coords are given in WGS84 so it doesn't apply in this case. Rounding error is almost certainly to blame: as every mariner knows, 1 minute is about 1 mile.