Leo Ringlstetter’s Post

Aircraft lessor ATSG reported a loss in the third quarter of the year as block hours decreased and costs increased. The company, which is in the process of being bought by investment firm Stonepeak for $3.1bn, saw revenues decline by 9.9% to 471.3m, operating income was down 52.9% to $21.7m and it swung to a net loss of $3.3m compared with a profit of $17.2m last year. #aircargo #airfreight #supplychain #logistics #aircraftlessor Air Transport Services Group, Inc. https://lnkd.in/e2-vsySz

Airline's Cost Index Dilemma✈️ ⏰️🆚️🛢🟰💸 🤹♂️What is it? An airline cost index (CI) is a numerical value used by airlines to optimize flight operations by balancing the costs of fuel consumption and flight time. It helps determine the most economical speed and altitude for a flight, considering factors like fuel prices, crew costs, and aircraft performance. 🤹♂️How is it calculated? The calculation of a CI involves weighing the relative importance of fuel costs and time-related costs. The exact formula can vary depending on the airline and its specific cost structure, but generally, it involves: ✅️1. Determining time-related costs: These include costs associated with crew salaries, aircraft depreciation, and overhead expenses. ✅️2. Calculating fuel costs: This depends on fuel prices, fuel consumption rates, and the distance to be traveled. ✅️3. Balancing the two: The CI is a ratio that compares the time-related costs to the fuel costs. A higher CI indicates that time-related costs are more significant, so the flight should be optimized for speed. Conversely, a lower CI suggests that fuel costs are more important, so the flight should be optimized for fuel efficiency. 🤹♂️How is it used in practice? Airlines typically use the CI in their flight management systems (FMS). The FMS calculates the optimal speed and altitude based on the specified CI, ensuring that the flight is operated in the most cost-effective manner. Pilots can adjust the CI during a flight to account for changing conditions, such as unexpected weather or fuel shortages. By effectively managing the cost index, airlines can significantly improve their operational efficiency and profitability.

DUBLIN, Jan 13 (Reuters) - The world's largest aircraft lessors forecast on Monday that manufacturing delays would drag on until the end of the decade at least, keeping prices high and limiting the entry of new players into an industry that controls half of the world's jets. The world's top lessors, all among the largest buyers of Boeing (BA.N), opens new tab and Airbus (AIR.PA), opens new tab aircraft, traded stories of crippling delays and sky-high lease rates paid by airline clients at the annual Airline Economics meeting in Ireland, where most of the industry is based. However, experts say the justices seem inclined to uphold the law, putting their focus on national security concerns. "Neither Airbus nor Boeing have been able to meet any - and I say any - of their production targets. And so the delivery delays are cascading and have a domino effect," said Steven Udvar-Hazy, executive chairman of Air Lease and one of the founders of the leasing industry. "We don't think that this recovery will be any shorter than three or four years to get back to normalcy." Leasing companies have seen rentals and resale values for jetliners rise as airlines try to meet new demand at the same time as planemakers are struggling to recover from the COVID-19 pandemic.

Norse traffic report for April was a positive surprise, in terms of passenger growth YoY and vs last month (March), though load factor still below 80%. After the tough winter season, follows the unpredictable shoulder season for airlines flying across the North-Atlantic. This impacts on Norse also and as Easter came in March, this gave some headwind on demand in April. Norse is testing out a mix of scheduled routes and charter/ACMI during the low season months, lets see when Q1 is published on 14MAY how this business model turned out in revenues and bottom line result. Well, we know its gonna be a deficit in Q1, but we might get some indications on how the business plan worked out. Operationally, Norse remains as one of the best, April was another month with 100% regularity, well done Norse team and the great B787-8/9 with RR Trent 1000 turbines. I have compared Norse April traffic data with peer Play (icelandic LHLC operating only across the North-Atlantic via Iceland). Norse (10xB787)/Play(10xA320 serie) Pax 98542/122217 - ASK 0,866/0,435m - RPK 0,680/0,370m - LF 81/85% OTP 81/89% - Regularity 100%/na None of the airlines disclose yield/unit revenues in their traffic reports. Outlook (my view) Norse is likely to continue on the growth path in terms of passengers and load factor in May, though the real jump in passengers and load factor should be expected in June, then Norse will get 2 more B787s into the fleet. These 2 B787s have been on lease the last two years.

Train data alert! FRA published its quarterly report on intercity passenger train performance, covering October - December 2023. This report provides data on Amtrak passenger train operations, including customer on-time performance and delays - and now features new route profiles. https://lnkd.in/gux6iTRS

✈️ How Do #Airlines Make Money on Long Flights? Ever wondered how airlines turn a profit on a single 10-hour flight? Here’s a simple breakdown that shows how it all adds up: 1️⃣ #Revenue Sources • First Class: $50,000 (10 seats @ $5,000 each) • Business Class: $70,000 (20 seats @ $3,500 each) • Economy Class: $120,000 (150 seats @ $800 each) • Other Revenues: $10,000 (cargo fees, upgrades, etc.) Total Revenue: 💰 $250,000 2️⃣ #Operating Costs • Fuel: $72,354 • Labor (pilots, crew, etc.): $67,586 • Additional Labor: $58,123 • Depreciation & Leasing: $37,500 • Miscellaneous (insurance, airport fees, catering, etc.): $42,175 Total Costs: 💸 $155,615 3️⃣ #Profit Margin After operating costs, airlines achieve a gross profit of $94,385. Once adjusted for various financial factors, the average net profit per flight stands at $39,835. What’s the takeaway? For airlines, profit margins depend on optimizing seat allocation, managing operating costs, and finding additional revenue streams like cargo or ancillary fees. Precision is key to staying in the sky—and staying profitable! #AviationBusiness #Profitability #CostManagement

#Traditional_costing methods are not always accurate, particularly in industries with a lot of indirect costs. #Activity_based_costing is a modern approach that is seen as providing more accurate and reliable information. Some #airlines have already adopted this method, and it's now being suggested that #airports do the same to benefit in areas such as pricing, budgeting, and performance evaluation.

Over the past decade, the air lease sector has seen significant growth. The demand for short and medium-term leases has surged, with more entrants joining the industry each year. Manufacturers facing delays and the rising post-pandemic passenger demand have made it challenging for carriers to quickly acquire the precise planes needed to adapt to market changes. #AirLease #AircraftIndustry #MarketTrends

How does the second-hand GSE market fare post-Covid? According to the fledging refurbishment company Adapt GSE, opportunities abound as airlines grapple with the need to boost passenger numbers, balance the books and keep up with market developments My piece in the Summer 2024 issue of Airside International...