If you only fly once or twice a year, Schubach Aviation owns and manages an extensive fleet of aircraft for on-demand charter services. When you’re in the air and on the move more frequently, full ownership makes more sense from a fiscal perspective. The Sherpa Report recommends that anyone flying more than 400 hours per year consider whole ownership over fractional ownership or on-demand services.
The sticker shock of buying your first plane can be mind-numbing. However, the initial acquisition cost is closely followed by ongoing expenditures for hangaring, routine maintenance, crew training and certification, salary and benefits for flight crews and maintenance technicians, insurance, inspections and a host of other necessary expenses to keep your aircraft operating in peak performance.
At first glance, shared-ownership (fractional ownership) might seem financially appealing. But when you consider the initial capital investment -- which can range from a few hundred thousand to more than a million dollars – plus inflight catering, pilot fees, fuel and maintenance, for essentially a rental agreement with availability constraints and limited ROI, private ownership with charter management services has a plethora of benefits.
Personal aircraft require routine maintenance and upkeep in the same way that a luxury automobile requires frequent washing and waxing to protect it from the elements and scheduled inspections to maintain the operating integrity. Even when a plane is housed in a controlled environment, exposure to weather on the tarmac and in flight exposes the craft to potentially harmful elements. The biggest cost of ownership is asset maintenance.
One of the most advantageous strategies to offset costs associated with ai...
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... data shows that 51% of airtime was for chartered services, sales tax is waived.
We provide accurate data collected from flight logs regarding how long the aircraft was aloft, the days of each trip, flight hours versus taxi time, and Hobbs time – the time an aircraft leaves the ground until it returns to the ground. Annually we supply owners and their designated tax representative a summarization of this information for tax preparation and exemption consideration; alleviating additional record keeping burdens for asset owners.
For owners that want to have a professionally managed asset without the time investment and additional expense of ancillary items and services, Schubach offers a comprehensive approach that includes consultation during the acquisition, arrangements for operational support and certification for Part 135 that is an effective and advantageous.
The new trend in airline industry to use fuel efficient, high -tech aircraft is of a major concern for Air Canada. It has been under immense pressure to replace its fleet aircraft with more efficient Boeing 777 aircraft. However, the airline has purchased some Boeing777 aircraft, but these new purchases are used only for more profitable international routes depriving Air Canada’s domestic consumers of the facility. Furthermore, the varied fuel price has affected pricing policy significantly as its promotional policies are more price point based as compare to consumer based.
Keen, M. and J. Strand (2007). "Indirect Taxes on International Aviation*." Fiscal Studies 28(1): 1-41.
Spirit addresses “price” by attempting to get the lowest possible fair for their potential customers. They have instituted their “unbundling” strategy that essentially removes all the conveniences that other airlines afford. Fees for checked bags, fees for flight changes, and no complementary in-flight beverages are just a few of the cost-trimming techniques employed. This strategy allows Spirit to come up with impossibly low fares. It also conforms to customers who just want to get from point A to point B without paying extra for services they don’t use. This strategy, coupled with an in-your-face “promotion” ploy, has made Spirit Airlines “the most profitable airline in the U.S.” (Nicas, 2012).
Having a low cost of operations is one of the contributing factors to Southwest Airlines’ financial success. Such low cost model of the corporation is brought about by an effective strategy. Southwest uses only one type of aircraft – the fuel-efficient Boeing 737. This tactic keeps training and maintenance costs down. Moreover, the no-frills approach to customer service contributed to the low cost of operations for Southwest.
A switch from premium overnight services to lower – margin deferred services and ground delivery services is an advantage to Airborne Express. With existing assets including trucks, tracking systems, regional hubs and sorting facilities, they only need minor initial investments to develop fully these kinds of services. They should use these assets wisely and effectively.
2.Price: A price must be set to add value to the consumer but also add revenue to the airline. Cost is considered the most volatile areas in the airline industry today; deregulation has forced pricing to become the major competitive variable. Like any industry supply and demand control the pricing elements of the ai...
Share costs- Air Canada share costs as they are the member with one of the star alliances in which they can contribute to the world and share cost.
Use of technology and automated processes to reduce reservation, ticketing and customer services costs. Paperless cockpits, use of e-manuals, electronic ticketing, owning its own in-flight entertainment provider, automated baggage handling are some of the examples where Jet Blue’s use of technology has lowered operating costs.
Flight fee is one of the biggest nightmares of the passenger. In this regard, such an initiative is a win-win situation for the Asiana airlines. The establishment of extensive cabin retrofits is also a great improvement to the customer service delivery. The airline also boosts customer experience in a bid to achieve the airline’s sustainability through the provision of lie-flat seats. The seats boost comfort for the passengers aboard; hence, reduction of exhaustion. According to Asian Development Bank (2009), the airline provides the passengers with a sizeable monitor, especially for the business class passengers. The practical productivity of team relies on upon its hypothetical planning, information of an aeronautical building, and tenets of its operation, including exceptional circumstances, and propensities for utilization of this learning, furthermore on order and determination of pilot-in-charge of aircraft and group individuals. The administration productivity air movement, the associations of flight action and a wide range of upkeep of aircraft in the greatest degree is controlled by the proficiency of the action association in the modern undertakings, cognizance of initiators, and the moral obligation of leaders of all positions for action concerning security control of
During 19991-1992, Modiluft, East West and Damania went bankrupt. Air Sahara and Jet Airways survived along with government own Indian Airlines because they had the capability to bear losses. Globalization and privatization had a major impact on aviation industry. Indian aviation industry was deregulated by the government in 1990s. As a result now 14 airlines are operating today in Indian sky. Now, collaboration with international organization and foreign direct investment are welcome to improve infrastructure and technology. Today people who can not afford high prices of Full Service Carriers (FSC) can travel by Low Cost Carriers (LCC) or budget airlines. Air Deccan was India’s first LCC started in 2003. It flies to several metro and non-metro destinations. All airlines have three major fixed costs i.e. fuel costs, financing or aircraft lease and labour cost. But LCC costs are 10 to 15 per cent lower than FSC. This is because of three reasons. Firstly, saving on distribution cost as passengers book tickets on the internet. Secondly, no frills are offered on board. Thirdly, to accommodate additional seats, catering and cabin crew space in these aircraft has been used. So these aircraft have 40 seats more than the FSC.
In April 1992, American Airlines launched "Value Pricing" -- a radical simplification of the complex pricing structure that had evolved over more than a decade following deregulation of the U.S. domestic airline industry. American expected that the new pricing structure would benefit consumers and restore profitability to both American and the industry as a whole. The critical issue raised is: Would American's bold initiative work?
With regard to product, JetBlue is cornering the marketplace with its productivity, in-flight features, and customer service. Due to the fact that the company only purchases new planes of a single type, maintenance downtime is reduced and it is able to keep its planes in the air. In fact, JetBlue maintains the highest in-air average in the industry. Additionally, JetBlue employs an "operational recovery tool" technology that allows planners to minimize flight cancellations and delays. On board, JetBlue prides itself on treating all customers as equals and providing more comfort than other airlines.
Ryanair is Europe’s largest low-fares, no-frills short-haul carrier. The organisation was founded in 1985 as a conventional airline but re-launched itself in 1990/1991 as a low-cost carrier, replicating American Southwest Airlines’ business model. Since then Ryanair has grown substantially and successfully. The company currently has 146 routes to 84 destinations in 16 countries, and carries more than 15 million customers annually. Ryanair aims to be Europe’s largest airline in 8 years (www.ryanair.com).
As Boeing’s CEO, Frank Shrontz promised to increase earnings and return on equity. Boeing had a history of making money when its competitors did not, but Mr. Shrontz wanted higher returns. The airline industry was characterized by large cash outflows for R&D and manufacturing and long payback periods over long life cycles for each new airframe design. Companies had to have deep pockets to keep the operation going while waiting for a return on their investments. If Mr. Shrontz could increase the return on equity for Boeing, it would increase the likelihood of Boeing’s continued success well into the future.
"Why Is Plane Maintenance So Important? -." Why Is Plane Maintenance So Important?. N.p., n.d. Web. 31 Dec. 2013. .