The profit analysis function in the quote snapshot provides a profit percentage for the operator. With various considerations, such as retail rate, cost to owner, fuel split, minimum split, collection of block time and/or applicable short leg fees along with consideration for overhead (cost) on line items, the system is able to provide a profit percent value. To set this up, follow these steps:
- Access the aircraft profile, click on the "Contract" tab. Under the contract tab, there are three available contract options (Segment Based, Quote Based or Flat Hourly). Select the applicable contract type and enter the details. In this case, we are focusing on flat hourly. Note: All values entered into this section are the values paid to the aircraft owner.
- Click "Save"
The custom rate option allows an operation to set whether the flight minimums and cost are based on the retail rate or the contract rate.
Billed rate = Rate in the Quote
Owner hourly = Contract Hourly/Position rates.
In the example below the owner is paid $3000/hour, given 100% fuel surcharge, 50% minimums at the $3000 rate, does not collect the block or any applicable short leg fee.
Here is a quote example:
The retail hourly rate in the rates tab is $3800/block hour.
The flat hourly paid to the owner is $3000/block hour.
The cost to the owner is the flight time 4:24 (4.4) times the $3000 = $13,200. The operator receives the difference ($3520). In this example, there is no positioning leg and no difference in rate. Note: The difference between the block time and flight time is calculated separately as Block Charges.
In this example, there are two line items totaling up $1800. Note: Fuel Surcharge and Daily Minimums are itemized in the Profit Analysis separately. Overheads values (cost) have been inputted for both line items, resulting in a $400 profit.
Flight Mins/Short Leg Fees:
Flight mins are split 50%. Each party receives $1500, since based on the contract rate of $3000/hour.
The difference between the block and flight time is 0.4 times the hourly of $3800 = $1520. Since block charges is not checked in the contract, this is profit for the operator indicating that the owner is receiving the flight time (not the block time).
100% goes to the owner; therefore, there is no profit on that fee.
If a discount is applied, it is deducted from the profit. The profit percentage is comparing the Total with Discount Profit value to the Pre-Tax Total on the quote.
In this example, $6940 divided by $26,720 = 26%.
Configure Profit Analysis within the Quote
In addition to configuring the contract rate information in the aircraft profile, the user is able to edit the contract rates within the quote. For example, if the user wants to look at the profitability when decreasing the operators collection of the daily minimums, that can be changed within the specific quote.
- In a quote, click the profit analysis drop down in the trip snapshot.
2. Select the custom rate type (segment based, quote based or flat hourly). Enter the applicable values and click "save."
3. To achieve a more accurate profit percentage with regards to the line items, enter an overhead value in the additional line item within the quote. For example, an overnight fee charge to the customer is $1250 but it will cost the operator $750. By entering the overhead amount (cost), the difference is figured and the profit is provided for the line items in the profit analysis.