When a quote is created and the aircraft being quoted has a contract and a completed owner cost section, the Snapshot & Tools > Profit Analysis provides the operation an estimated Profit Percentage. The Profit Percentage is the % the operation will make on the quote. This guide will outline:
- the calculations of the profit analysis
PROFIT ANALYSIS CALCULATIONS:
Here is a detailed break down on how the profit analysis values are calculated based on the Contract, the Owner Cost regarding a specific quote situation.
In this example the total POS (position) flight time is 0.4 and the total PAX (passenger) flight time is 6.1.
0.4 times $3200 (this value is from the owner cost) = $1,280
6.1 time $3200 = $21,120
Note: If operations have different rates and owner costs for PAX vs. POS, separating these calculations are ideal.
Example of the quote:
Profit Analysis Results:
Passenger Leg: 3.1 + 3.5 = 6.6 times the $3200 owner cost hourly rate = $21,120
6.6 times the $4000 retail rate = $26,400
$26,400 - $21,120 = $5,280
Positioning Leg: 0.2 + 0.2 = 0.4 times the $3200 owner cost hourly rate = $1,280
0.4 times the $4000 retail rate = $1,600
$1,600 - $1,280 = $320
Line Items: Set overhead on each line item, so the cost and profit can calculate. In this example, the 3 overnights have a $100 profit on each. The customer is being charged $600 times 3 and the cost is $500 by 3, so the profit is $300 ($100 times 3) for the operator.
Flight Mins/Short Leg Fees: The owner is getting paid 50% of the Daily Minimums based on the Flight Time with the owner hourly rate of $3,200. 8 hours of daily minimums are required. Subtract 8 hours minus the 7 hour flight time = 1 hour. 1 hour times the $3200 = $3,200. 50% of $3,200 is $1,600. That is the cost for the operation to the owner. In this example, there is a $400 Short Leg Fee and the owner DOES NOT collect, so that is a profit for the operator. $1,600 plus the $400 = $2000 for the profit for Flight Mins/Short Leg fees for the operator.
Surcharge: $4,680 is the calculated Fuel Surcharge. 100% is set to go to the owner. That is a cost to the operator.
Block Charges: The owner is set to NOT collect the Block Charges. $3,200 goes to the operator. This is calculated by taking the BT (7.8) minus the FT (7.0) = 0.8 times the retail rate $4,000 = $3,200.
Profit Percentage: The percentage the operator is making on this quote scenario.
Example of the Contract and Owner Cost: