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Thread: Are Airpot runs really worth it?

  1. #1
    Senior Member
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    May 2002
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    Lupton mich USA
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    I just got my insurance bill for the next year and I was pleasantly suprised. Three 8/10 Pax, 2 million liability (no physical damage) $4,340.00 total. My agent told me that because I do so few airport runs, (less than 5% of my total bookings) and have a lot less exposure, my rates a very favorable.

    That brings me to the question. Are airport runs really worth it? I know if you are in an area where there is a lot of travel going on and you specialize in Sedan service the answer is yes but what about those of us who do the not enjoy this bennifit. When I first started, I tried to push for air port business, I have a nice Mercury Sedan but to include that in my fleet mix, would cause my insurance to be much higher.

    Next problem is you have to cut the rate on a Airport run so close to the bone in order to get some of them if you are competing aganist others that by the time you pay the Driver, the headaches of flight delays and having to make last min. changes in scheduling and the B.S. we get from some air ports, would it not just be easier to say let the Taxi Company deal with it?

    If I get an airport inquirey now, I just quote it as an hourly charter, Garage to Garage, take it or leave it. To me it is just another run, I use the 120 weather it is 1 person or 8 people, same price. Granted I do not generate a lot of airports but when I do get one, I do not loose my "6" doing it.

    Just some thoughts from out here in the country.
    David E. Merrill

  2. #2

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    I guess those were all rhetorical questions...

    Typical airport runs are typically thin margins runs and are best left to those who can do them in high enough volume to make it profitable.

    Your approach sounds reasonable considering the low volume of airport jobs you get.
    Tony Franzetti
    Marriton Limousine, Austin, TX
    Austin Limousine service, Austin airport service, austin bus charters
    http://www.marritonlimo.com

  3. #3
    Senior Member Limo Padawan
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    Aug 2003
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    Red Deer, Alberta. Canada
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    What does "exposure" have to do with anything. As far as I am concerned you are exposed the minute you hit the road, no matter what you are driving, or where you are going. My thought is that insurance companies are lumping in airport runs as if you were supplying a taxi service. That would be exposure. Taxis traditionally have a higher (potential) accident rate. I think that properly managed and in sufficient quantity airport runs are an excellent source of revenue. Besides David, if I recall, you were the one that said "a dollar over the breakeven is still a dollar profit" (or something to that effect). I agree with your approach to airport runs for you. It's how you make what you have work for you.
    Daryl Frenette, Premier Limousine Services Ltd.Red Deer, Alberta, Canada

  4. #4
    Senior Member ADAM's Avatar
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    Oct 2003
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    Kalispell, Montana USA
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    David, you raise valid questions that every operator should consider as they build their business. You are in a unique situation and probably made the best decision for your situation. Airport trips bring a different set of challenges to our business, but they allow us to focus full time on luxury transportation, help defray overhead and fixed expenses and open up new opportunities with affluent people. We also get a chance to meet and deal with more delightful and interesting people, making new friends along the way. We must carefully evaluate the trips and know our costs per mile and our necessary mark-up to pursue this business. Otherwise we could end up with a very expensive and unprofitable vehicle draining our coffers. We certainly have days when we ask, "Why are we doing these airport trips?" However, when we get a check at the end of the month for x thousand dollars every month, we are delighted to deposit it in the bank to pay all our bills and to pay ourselves a little something, too. One airport transfer turned into $2400 for us last summer.

    Marc Rold
    Wild Horse Limousine
    Marc Rold
    Wild Horse Limousine
    www.wildhorselimo.com

  5. #5
    Senior Member
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    Daryl: It is true that $1.00 over break even is a profit. The problem is that some times you do not even break even on some of these runs. I worked for a Guy in Detroit who does on a regular basis an airport run that he charges $35.00 for but it is a 70 mile round trip. This particular run is part of a larger package deal that some times is generous but this run accounts for about 75% of the deal.

    This particular run is a real pain because the parties are rarely ready to go, it involves side trips to pick up others or stuff along the way. It is usually at heavy traffic times.

    With regard to exposure, I agree that you are exposed every time you pull the car out of the garage. The problem is like you said, when the insurance companies see Sedan, the first thing they think of is the dreaded "T" word. Same with workers comp. I get a good deal on mine, it is only $10.50 per $100.00 this year, down from $11.99 last year. Why so much? the dreaded "T" word again. My Limo Chauffeurs, who do not face any of the hazzards of a Taxi Driver are lumped into the same catagory as Taxi Drivers.

    For Marc: Yes it is great to have that check come in and it is great to have solid customers. As long as that Customer stays solid. I guess it is risk and reward and any business is a gamble. Should that Customer fall on bad financial times, and you have a very thin margin, all it would take is one good default to wipe out any profit you made in the past.

    When I was in the Taxi business, we had a contract with Chrysler to transport workers to the Doctors office. It was a very thin margin but in order for us to keep it from the other Taxi operator, it was necessary. When Chrysler fell on bad times back in the early 80's we had to wait a long time to get a percentage of what they owed us. In addition to that, they asked us to cut our already very thin margin during that time. In the end, we did loose money on the deal.

    New York central Rail Road was the largest corp in the country at one time, Eastern Airlines, TWA and Pan Am were some of the bigest airlines in the country, where are they now. Please do not get me wrong, I am not preaching gloom and doom here. If it is working for you then that is great but if it is marginal, why keep it.
    David E. Merrill

  6. #6

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    Airport Runs have always had minimal profit. We look at airport runs like advertisement. More people that have our cards in their wallets, the more likely they'll call us if they need a charter. It costs us $900-1200 to advertise in EACH Yellow Book. The way I look at it...running a stretch back and forth to the airport is cheaper than the yellow pages.

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