Owning vs. charter vs. airlines

This is all about angels on the head of a pin, but if your executive and the
rest of the team on the plane is worth $2,000 per hour, it doesn't take much
time to make it all make sense.

Especially if those people would skip to your competition or otherwise be
less valuable because they got tired of living at the airport and being away
from their families.

Mike Rapoport wrote:

"Mike" wrote in message
...

On Fri, 1 Apr 2005 01:21:11 -0600, "Scott Jensen"
wrote:


There is usually a point where it is cheaper to do it yourself than have
someone else do it for you. What I'm wondering is what would that point
be
when it comes to trans-world air travel. When does buying your own jet
and
employing your own pilots make economic sense than using an airline? Or
will the airlines always be cheaper?

More specifically, let's say you have a number of employees in Fiji. Each
gets four round-trip flights to anywhere in the world each year as part of
their benefit package. Most will want to use at least one of those for
the
Christmas season to spend the holidays with family. There would also be
an
expected heavier usage of their flight options during the summer. The
question I have is: How many employees would one need to have where buying
a
private jet and employing pilots would make economic sense? Would there
also be a span between these two options where chartering a private jet
would make economic sense?

Scott Jensen

I am pretty sure that private jet ownership will lose in a pure cost
comparison. However, to make a fair comparison, one would have to
consider many factors. What is the passenger's time worth? Is there
convenient regular scheduled service? etc. A round trip first class
ticket from the US to Europe can be upwards of $10,000 if purchased at
the last minute. Or you could buy your own Boeing Business Jet for
$40,000,000. Even if only used for one trip, the BBJ could have a net
lower cost. If the passenger takes the commercial flight for $10,000
and the airline gets him there late and he loses the $4 billion dollar
deal, then you can see why he would be better off spending the money
for the BBJ.


How would the BBJ have a lower cost?


With BBJ: $4,000,000,000 income from deal
-40,000,000 cost of BBJ
--------------------------------
$3,960,000,000 net income to company

Without BBJ: $ 0 income from deal
-10,000 cost of airline ticket
-------------------------------------
$ -10,000 net income (loss) to company

Net cost to company of not owning BBJ: $3,960,010,000

These numbers aren't typical, but then again these days they're
not unreasonable.

Rich Lemert

In article , Mike
wrote:

€ On Fri, 1 Apr 2005 01:21:11 -0600, "Scott Jensen"
€ wrote:
€
€ There is usually a point where it is cheaper to do it yourself than have
€ someone else do it for you. What I'm wondering is what would that point be
€ when it comes to trans-world air travel. When does buying your own jet and
€ employing your own pilots make economic sense than using an airline? Or
€ will the airlines always be cheaper?
€
€ More specifically, let's say you have a number of employees in Fiji. Each
€ gets four round-trip flights to anywhere in the world each year as part of
€ their benefit package. Most will want to use at least one of those for the
€ Christmas season to spend the holidays with family. There would also be an
€ expected heavier usage of their flight options during the summer. The
€ question I have is: How many employees would one need to have where buying a
€ private jet and employing pilots would make economic sense? Would there
€ also be a span between these two options where chartering a private jet
€ would make economic sense?
€
€ Scott Jensen
€
€ I am pretty sure that private jet ownership will lose in a pure cost
€ comparison. However, to make a fair comparison, one would have to
€ consider many factors. What is the passenger's time worth? Is there
€ convenient regular scheduled service? etc. A round trip first class
€ ticket from the US to Europe can be upwards of $10,000 if purchased at
€ the last minute. Or you could buy your own Boeing Business Jet for
€ $40,000,000. Even if only used for one trip, the BBJ could have a net
€ lower cost. If the passenger takes the commercial flight for $10,000
€ and the airline gets him there late and he loses the $4 billion dollar
€ deal, then you can see why he would be better off spending the money
€ for the BBJ.

$4 billion dollar deals are pretty rare.

"Alan Street" wrote in message
...

$4 billion dollar deals are pretty rare.

Not any more! Wal-Mart alone does 100 of those each year.

"Matt Barrow" wrote in message
...

"Alan Street" wrote in message
...

$4 billion dollar deals are pretty rare.

Not any more! Wal-Mart alone does 100 of those each year.




Name one.

Mike
MU-2

"Mike Rapoport" wrote in message
k.net...

"Matt Barrow" wrote in message
...

"Alan Street" wrote in message
...

$4 billion dollar deals are pretty rare.

Not any more! Wal-Mart alone does 100 of those each year.




Name one.

Kimberly Clark, RubberMaid...

In article , Matt Barrow
wrote:

€ "Alan Street" wrote in message
€ ...
€
€ $4 billion dollar deals are pretty rare.
€
€ Not any more! Wal-Mart alone does 100 of those each year.
€
€
€

That would imply about $400 billion a year turnover. According to
WalMart's financial statements, their total turnover was $259 billion
last year. ( http://finance.yahoo.com/q/is?s=WMT&annual ).

"Alan Street" wrote in message
...
That would imply about $400 billion a year turnover. According to
WalMart's financial statements, their total turnover was $259 billion
last year. ( http://finance.yahoo.com/q/is?s=WMT&annual ).

Hey Alan... Didn't know that you frequent this group also... What's up? No
diving in San Diego this weekend? Up here the water has visibility as bad
as New Orleans and it's cold to boot...

"Alan Street" wrote in message
...
In article , Matt Barrow
wrote:

? "Alan Street" wrote in message
? ...
?
? $4 billion dollar deals are pretty rare.
?
? Not any more! Wal-Mart alone does 100 of those each year.
?
?
?

That would imply about $400 billion a year turnover. According to
WalMart's financial statements, their total turnover was $259 billion
last year. ( http://finance.yahoo.com/q/is?s=WMT&annual ).

Okay...they do 65 of them.

Read Sam Walton's biography how he changed the way of dealing with vendors.

"Alan Street" wrote in message
...
In article , Mike
wrote:

? On Fri, 1 Apr 2005 01:21:11 -0600, "Scott Jensen"
? wrote:
?
? There is usually a point where it is cheaper to do it yourself than
have
? someone else do it for you. What I'm wondering is what would that
point be
? when it comes to trans-world air travel. When does buying your own jet
and
? employing your own pilots make economic sense than using an airline?
Or
? will the airlines always be cheaper?
?
? More specifically, let's say you have a number of employees in Fiji.
Each
? gets four round-trip flights to anywhere in the world each year as part
of
? their benefit package. Most will want to use at least one of those for
the
? Christmas season to spend the holidays with family. There would also
be an
? expected heavier usage of their flight options during the summer. The
? question I have is: How many employees would one need to have where
buying a
? private jet and employing pilots would make economic sense? Would
there
? also be a span between these two options where chartering a private jet
? would make economic sense?
?
? Scott Jensen
?
? I am pretty sure that private jet ownership will lose in a pure cost
? comparison. However, to make a fair comparison, one would have to
? consider many factors. What is the passenger's time worth? Is there
? convenient regular scheduled service? etc. A round trip first class
? ticket from the US to Europe can be upwards of $10,000 if purchased at
? the last minute. Or you could buy your own Boeing Business Jet for
? $40,000,000. Even if only used for one trip, the BBJ could have a net
? lower cost. If the passenger takes the commercial flight for $10,000
? and the airline gets him there late and he loses the $4 billion dollar
? deal, then you can see why he would be better off spending the money
? for the BBJ.

$4 billion dollar deals are pretty rare.

And ones that get lost because you get there a day later are non-existant.

Mike
MU-2