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> Singapore Air returning this plane already (and there's a second as well) means that the plane simply isn't profitable (or profitable enough) for them to keep
by danmaz74 9y ago
> Singapore Air returning this plane already (and there's a second as well) means that the plane simply isn't profitable (or profitable enough) for them to keep flying.
They were leasing that A380, and now they'll lease a newer and more efficient A380. The new one will be for sure more profitable for them, but you can't deduce the old one wasn't profitable.
- valuearb 9y agoThere is no way a new A380 is more efficient in total cost of ownership given it’s going to cost more than twice as much. They took the biggest depreciation hit up front. If this made sense, all airlines would lease for 10 years and replace with new leases.
- danmaz74 9y agoThe comparison isn't with the potential new price of the old one, but with the old price of the old one. Say they were paying X per year for #1. Adjusted for inflation, they're going to pay roughly the same X per year for #2, but #2 is more efficient, AND in line with Singapore's positioning as a top airline with a very young fleet. I also expect that keeping #1 would have a lower lease cost, but a higher maintenance and insurance cost.