Cost of leasing new planes
Do you know how much each 737-8Max aircraft leased will cost per month?
Auntie’s answer: I asked your question of Fabian Whorms, the president and CEO of Cayman Airways, who said he unfortunately cannot divulge the cost of the monthly lease “due to its commercial sensitivity”.
He did offer some information on the process, though, and the reasons for leasing the 737-8Max, explaining “with the necessary retirement of the B737-300 aircraft fleet imminent, Cayman Airways is very fortunate to have secured exceptional lease rates and terms on the brand new B737-8Max aircraft”.
Mr Whorms added that if the airline had not been able to secure those rates, the likely alternative would have been to lease B737-800 aircraft that were from 10-15 years old, for a comparable monthly cost. However, he pointed out that those planes would be “significantly more expensive to operate than the B737-8Max”, which would translate into much higher overall operating costs compared to a brand new B737-8Max.
Category: Ask Auntie
they practically get to lease 4 at the cost of leasing 2 or 3. Would you not make a jump on this as well, considering some of 737s we are flying were built in the 80s and early 90s.
A list price for 737-8Max is US$112.4 million….
A320 NEO. $110.6 million – and a better aircraft.
CAL is not a private family-owned airline, who is Mr Whorms to say that the public can’t review the balance sheet for a public entity? The Ombudswoman must immediately purge bad actors entrenched in our public agencies, and force a date for enactment of the Standards in Public Life Law. What are we waiting for?
Three letters, one word…… FOI request!
Could someone please explain why airbus aircraft were not an option? Was any competitive bid sought? Was there any formal analysis?
Waiting on Mr. Whorms to acknowledge an email from a year ago he asked me to send to his attention.
Auntie: Have you re-sent it? Sometimes emails go straight into spam or trash boxes or get lost in cyberspace.
Typical CAL management: running around like a headless chicken. Not so long ago we were told, with great pride, that CAL actually owned all of their planes and this was much better than leasing as they appeared as assets in the balance sheet and there were no recurring costs.
Now it seems that is wrong and leasing is the flavour of the month.
Which is better: to pay rent or own your own home?
these assets don’t appreciate in value like a home so it’s different
Yes this is the cost to lease a 737 800 per month is 350,000USD per month according to airliners.net So to lease 4 x 350,000 x 12 months = 16,800,000USD per year. Can the Cayman Islands afford this?
Sure, but only with the $10mln/yr subsidy from CIG, and deliberate recurring non-payment of intergovernmental department fees (CIAA landing fees, Customs, Immigration etc) of >$5mln/year, settled periodically by CIG via budget portfolio swaps.
https://www.caymancompass.com/2013/01/21/cayman-airways-in-32m-debt-for-landing-fees/
It doesn’t matter really how many right decisions Mr. Whorms and his team make, ultimately most of us Caymanians are going to criticize just because we can.
For an airline the size of Cayman Airways to have made a deal where they are getting brands new planes at the same monthly cost of the older 15yr old versions is a minor miracle. These will either carry our airline and country for the next 2 decades or they could probably make money sub-leasing them out them selves for twice the price.
Either way I think they’ve done a great job.
You have introduced information that is not true. Where, my friend is it stated the costs are the same? The word used is ‘comparable’. It is a carefully chosen word because it can be interpreted many different ways. For one, the revenue generated for a plane that carries far more passengers would only be ‘comparable’ if it was being utilized at high capacity and for at least 3000 hours a year.