More multiplier brackets

[ADAM-007]

In addition to this some what - Would it be possible to make airlines worth over say 100bil go down to 10x or something?

We just have so much money now that there is no real aim financially anymore.

I've considered 'burning' some of our cash but was met with a great backlash from my pilots when suggesting this.

[joefremont]

In addition to this some what - Would it be possible to make airlines worth over say 100bil go down to 10x or something?

We just have so much money now that there is no real aim financially anymore.

I've considered 'burning' some of our cash but was met with a great backlash from my pilots when suggesting this.

Do we need to add some sort of 'property tax' to help reduce the surplus?
Alternately the minimum dynamic multiplier is 25x at 5B of assets, should we add another step say 10x at 10B or 20B?

[ADAM-007]

Do we need to add some sort of 'property tax' to help reduce the surplus?
Alternately the minimum dynamic multiplier is 25x at 5B of assets, should we add another step say 10x at 10B or 20B?

Property tax, aircraft tax I'm happy to try whatever to clear out some of this cash.

Re lowering it that early, being the size we are I think its unfair for me to comment.

But would love to suggest something perhaps?

25B Assets - 20x
50B Assets - 15x
100B Assets - 10x
200B Assets - 5x
500B Assets - 1x

I feel I know what you and few would say to this 'Its already complicated enough'

I think a general vote here might give some indication of what others think?

[joefremont]

Property tax, aircraft tax I'm happy to try whatever to clear out some of this cash.

Re lowering it that early, being the size we are I think its unfair for me to comment.

But would love to suggest something perhaps?

25B Assets - 20x
50B Assets - 15x
100B Assets - 10x
200B Assets - 5x
500B Assets - 1x

I feel I know what you and few would say to this 'Its already complicated enough'

I think a general vote here might give some indication of what others think?

HI Adam

Right now the basic rule for multipliers is it starts at 1000x and is reduced by about 25-33% for every 500M in assets until it reaches 25 then stops, the current steps are 1000, 700, 500, 300, 225, 150, 100, 75, 50, 35, 25.

If we were to follow that pattern the next steps might be 15, 10, 8, 5, 3, 2, 1, if we followed the current pattern you would reach 1x at 8.5B

Looking at your airline as an example, as it is the biggest, here is some data for activity since the start of 2022

Total income : 179B
Investments: 56B (new aircraft, conversions, etc.)
Expenses: 4.5B
Raw profit from fights if at 1x would be 7.1B
Total Assets 348B
Aircraft: 978 (405 added since 1/1/2022)
Pilots: 21 (46.5 ac per pilot).

So could your VA operate at 1x? I think so, you would not have been able to add so many aircraft but given the number you have you could argue you don't really need them and if you had not added so many your expense would be lower. But even at 5x it would have reduced your expansion of aircraft somewhat.

A lot of data to be sure

Suppose starting at 20B, every time the assets double we reduce a step and stop at 5x so

20B assets 15x
40B assets 10x
80B assets 8x
160B assets 5x

Thoughts?

[ADAM-007]

Suppose starting at 20B, every time the assets double we reduce a step and stop at 5x so

20B assets 15x
40B assets 10x
80B assets 8x
160B assets 5x

Thoughts?

I like that idea and am in favour of it.

[joefremont]

i did a quick check of the numbers. Based on flights flown since 1 Jan 2022, If we were to adopt this, of all the airlines with more than 20B in assets, there is only one airline that would have negative clash flow with the new multiplier that had positive cash flow with the old 25x multipler.

That airline would have lost 177M but has 68B in cash so I don't think it would be a hardship.

I did this by comparing parking and maintenance fees to flight profit.

[ADAM-007]

Interesting, I think this is the answer re slower growth for us big guys.

When you say the new system, have you implemented that just yet?

[joefremont]

I have NOT implemented this yet. Going to give some more time for others to comment, but it’s an easy change

[joefremont]

I have split this subject off from the original request as it had gone off in a different direction and I wanted to expose it to others before I make any changes.

[Robert Neumaier]

Hi,
I think, there is no need to change anything. If an airline feels to have soooo much money, that they dont have anymore aim to reach, i suggest a kind of sponsorship. I mean, donate Billions ( or millions) to its partnership airlines, or even to other airlines. I bet , they would LOVE to receive some money.
Would be cool to see smaller airlines growing, getting bigger as having NOT a money problem, by the help of a sponsor.

Best greetings
Robert

[joefremont]

Hi,
I think, there is no need to change anything. If an airline feels to have soooo much money, that they dont have anymore aim to reach, i suggest a kind of sponsorship. I mean, donate Billions ( or millions) to its partnership airlines, or even to other airlines. I bet , they would LOVE to receive some money.
Would be cool to see smaller airlines growing, getting bigger as having NOT a money problem, by the help of a sponsor.

Best greetings
Robert

Well to be honest transferring of money between has caused lots of problems and I have done my best to prevent it.

[ADAM-007]

I know you floated the idea of investments Joe, any further thoughts on that?

[joefremont]

I know you floated the idea of investments Joe, any further thoughts on that?

Your going to to refresh my memory on that one.

[Efad]

I think what our colleague Robert Neumaier said, is the right thing to say,

"I think there is no need to change anything. If an airline feels it has so much money that it no longer has a target to hit, I suggest some sort of sponsorship. I mean, donate billions (or millions) to their partner airlines, or even other airlines. I bet they would LOVE to get some money.
It would be great to see smaller airlines grow, get bigger and NOT have a money problem, with the help of a sponsor."

Instead of implementing Multiplier reduction, wouldn't Joe be better off implementing what in real life happens; for example:

1) The collection of airport fees, not just parking. They are landing and takeoff fees, this one is charged by the Maximum Landing and Takeoff Weight. I think Joe is already familiar with it.

2) The charge for Radio Aids, Airspace crossing.

3) I see feasible, the property tax.

4) Aircraft insurance.

I think all of the above could be more feasible than the modification of multipliers.


Erick Fco. Aldrighetti.
CEO- VVA 45312

[BVG002]

More multiplier brackets
Unread post by ADAM-007 » Fri Feb 10, 2023 10:58 am

In addition to this some what - Would it be possible to make airlines worth over say 100bil go down to 10x or something?

We just have so much money now that there is no real aim financially anymore.

I've considered 'burning' some of our cash but was met with a great backlash from my pilots when suggesting this.
Adam
If your VA is loosing the urge or " there is no real aim financially anymore " just give all your money to less fortunate airlines then they will be able to buy planes they couldn't buy before and then your VA will be able to start all over again and start enjoying to fly rather than making money, its brilliant just to enjoy a flight and not worry about how much money you have to make for the VA (just a thought mate).
Ernie BVG-002