If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. |
|
|
|
Thread Tools | Display Modes |
|
#1
|
|||
|
|||
Why haven't rental rates come back down?
Why didn't rental rates come back down with the price of fuel? Renters saw major increases in rates during the fuel price run up. After the oil bubble burst my FBO dropped their rates a tiny fraction as the price of fuel dropped back down to where it used to be. When I asked what was going on the chief pilot explained that they call around to other FBOs and their price is competitive. I called around and found that he was correct, everybody's price is still up. I also ran a quick study from their online booking system and found that their rentals were down 60% in December and 54% in January. My comment to the chief pilot was that airplanes sitting on the ground aren't doing anybody any good. He ignored me. So what is going on? Is there some invisible expense increase at FBOs that's keeping their prices up or do they not understand the laws of price and demand? -- Dallas |
#2
|
|||
|
|||
Why haven't rental rates come back down?
"Dallas" wrote in message .. . Why didn't rental rates come back down with the price of fuel? Renters saw major increases in rates during the fuel price run up. After the oil bubble burst my FBO dropped their rates a tiny fraction as the price of fuel dropped back down to where it used to be. When I asked what was going on the chief pilot explained that they call around to other FBOs and their price is competitive. I called around and found that he was correct, everybody's price is still up. I also ran a quick study from their online booking system and found that their rentals were down 60% in December and 54% in January. My comment to the chief pilot was that airplanes sitting on the ground aren't doing anybody any good. He ignored me. So what is going on? Is there some invisible expense increase at FBOs that's keeping their prices up or do they not understand the laws of price and demand? -- Could be a matter of fuel contracts. I don't things are nearly as simple as the price of fuel each time they refill their tanks. I know a lot of folks in the manufacturing business are still trying to use up expensive metal inventories. I guess it just takes a while. |
#3
|
|||
|
|||
Why haven't rental rates come back down?
In article ,
Dallas wrote: Why didn't rental rates come back down with the price of fuel? Renters saw major increases in rates during the fuel price run up. After the oil bubble burst my FBO dropped their rates a tiny fraction as the price of fuel dropped back down to where it used to be. When I asked what was going on the chief pilot explained that they call around to other FBOs and their price is competitive. I called around and found that he was correct, everybody's price is still up. I also ran a quick study from their online booking system and found that their rentals were down 60% in December and 54% in January. My comment to the chief pilot was that airplanes sitting on the ground aren't doing anybody any good. He ignored me. So what is going on? Is there some invisible expense increase at FBOs that's keeping their prices up or do they not understand the laws of price and demand? At least some of the small operators out here have been in the hole for quite a while, and they've been effectively "floating a loan" for renters. When the fuel prices coming back down, their fixed costs weren't coming down at the same time. If they could get caught up a bit, they could start bringing their rates down after a delay, but when the economy dived, that wasn't going to work as people just quit renting and taking lessons, in some cases because they'd lost their jobs. It's been a marginal business at the best of times for a lot of them, and they're succumbing now. |
#4
|
|||
|
|||
Why haven't rental rates come back down?
"Steve Hix" wrote in message ... It's been a marginal business at the best of times for a lot of them, and they're succumbing now. True. Coupled with the truth that most FBO/flight schools are ran by folks who know far more about aviation than they know about business management. Vaughn |
#5
|
|||
|
|||
Why haven't rental rates come back down?
In article ,
"vaughn" wrote: "Steve Hix" wrote in message ... It's been a marginal business at the best of times for a lot of them, and they're succumbing now. True. Coupled with the truth that most FBO/flight schools are ran by folks who know far more about aviation than they know about business management. Most small businesses know far more about their product than they do business management. We just feel worse when the FBO folds than we do the pizza shop. Usually. |
#6
|
|||
|
|||
Why haven't rental rates come back down?
Dallas wrote:
Why didn't rental rates come back down with the price of fuel? Renters saw major increases in rates during the fuel price run up. After the oil bubble burst my FBO dropped their rates a tiny fraction as the price of fuel dropped back down to where it used to be. When I asked what was going on the chief pilot explained that they call around to other FBOs and their price is competitive. I called around and found that he was correct, everybody's price is still up. I also ran a quick study from their online booking system and found that their rentals were down 60% in December and 54% in January. My comment to the chief pilot was that airplanes sitting on the ground aren't doing anybody any good. He ignored me. So what is going on? Is there some invisible expense increase at FBOs that's keeping their prices up or do they not understand the laws of price and demand? This is no different that when oil futures go up, gasoline in the ground skyrockets up immediately to pay for the new gasoline that will be coming in. When the oil goes down, you do not see the gasoline go back down as quickly. Even when the oil and gasoline reserves were getting larger. If you are willing to pay it they will charge that much. -- Regards, Ross C-172F 180HP Sold KSWI |
#7
|
|||
|
|||
Why haven't rental rates come back down?
On May 7, 7:24*pm, Dallas wrote:
Why didn't rental rates come back down with the price of fuel? At my FBO they only increased the wet rate from $72 to 82/hr. http://www.northstarmso.com/Home/tab...3/Default.aspx ----- - gpsman |
#8
|
|||
|
|||
Why haven't rental rates come back down?
On Fri, 8 May 2009 09:14:43 -0700 (PDT), gpsman wrote:
At my FBO they only increased the wet rate from $72 to 82/hr. http://www.northstarmso.com/Home/tab...3/Default.aspx Wow... I wanna move up there... My FBO, at the peak, was charging $105 an hour *for a Cessna 150*. When I started with them a few years ago they were $68 bucks an hour. Now fuel prices are down to where they were when I started and they charge $95 an hour... again *for a Cessna 150*. An old 1970's Cessna 172 costs $120 an hour. It wasn't that long ago you could get a factory new Skyhawk SP with a G1000 for $120. -- Dallas |
#9
|
|||
|
|||
Why haven't rental rates come back down?
Dallas wrote in
: An old 1970's Cessna 172 costs $120 an hour. It wasn't that long ago you could get a factory new Skyhawk SP with a G1000 for $120. My FBO/Flight School charges $95.00 (wet) for a 172, a $3 increase from last year. 15G http://skyparkaviatorsclub.com/skypa.../indexnew2.php |
#10
|
|||
|
|||
Why haven't rental rates come back down?
On Tue, 12 May 2009 20:07:24 GMT, Bob wrote:
My FBO/Flight School charges $95.00 (wet) for a 172, a $3 increase from last year. Those are sweet prices. I hope you appreciate the good deal you've got going there. -- Dallas |
|
Thread Tools | |
Display Modes | |
|
|
Similar Threads | ||||
Thread | Thread Starter | Forum | Replies | Last Post |
Blue Angels back in Pensacola - practice session - Diamond heading back to the hangar | Pensacola Beachcomber | Aviation Photos | 0 | March 23rd 08 04:28 PM |
Ways of Getting The Lowest Possible Life Insurance Rates.( lowestlife insurance rates) | [email protected] | Piloting | 0 | March 23rd 08 09:21 AM |
Ouch!!! Wet rates keep going up! | [email protected] | Piloting | 92 | October 2nd 07 07:43 PM |
Frame Rates | Jim Kamp | Simulators | 10 | August 7th 05 09:03 PM |
Better way than Wet Rates? | Tim Hogard | Owning | 14 | November 2nd 04 06:28 PM |