Olympic Class Business Case Financials


Aug 26, 2009
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Hello,

My name is Joseph Mortati and I am an American living in Virginia (about 25 miles/40 km west of Washington, DC). I am writing a book about the business story behind Titanic and her sisters and am asking for this group's help in comparing the expected total expenses and revenue between Olympic and Lusitania Class ships on an annualized basis (I know passenger configurations changed over time and the surviving ships were converted from coal to oil burning in the 1920s, so I am looking for the business case numbers when the ships were new).

I need to create a cashflow diagram for each ship based on 25 years of operations and specifically, I have the following questions:

1. What were the average, total round-trip costs for Olympic and Lusitania in 1910?

I found a reference attributed Bruce Ismay that Titanic cost "$175,000 per voyage" but I cannot confirm its authenticity. If this is correct, based on £1 = $4.70 in 1910, each roundtrip cost £37,234 (or £18,617 each way).

I have found nothing explicit about Lusitania's overall operating expenses except that she burned 37% more coal per day than Olympic - 850 tons vs. 620 tons (https://www.encyclopedia-titanica.org/an-olympic-class-propulsion-system.html).

2. How much did Olympic and Lusitania each earn annually from Royal Mail contracts?

During the American inquiry (http://www.titanicinquiry.org/USInq/AmInq11Ismay01.php), Bruce Ismay stated "We have a mail contract for carrying the mails from Southampton to New York, for which we receive a lump-sum payment of £70,000 a year". How much of that would have been apportioned to Olympic?

As far as Lusitania, Wikipedia (http://en.wikipedia.org/wiki/RMS_Lusitania) states, "The ships [Lusitania and Mauretania] would receive an annual operating subsidy of £75,000 each plus a mail contract worth £68,000." Does that mean the £68,000 mail contract was split between the two?

3. What was the expected annual occupancy rate by class - First, Second, and Third? If no such numbers are available, what would the seasonal rates be by Class? If seasonal rates are not available, what percent of Third Class tickets would go unsold on the return voyage to England? By the way, I read Capt. Weeks' excellent article, "Titanic Passenger Ticket Revenues" posted on this site, which calculates total possible revenue per voyage based on 100% occupancy.

Many thanks,

Joseph

[Moderator's note: An identical message posted to a different thread has been deleted. MAB]
 

Mark Baber

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Jul 4, 2000
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What were the average, total round-trip costs for Olympic and Lusitania in 1910?

Joseph, Olympic didn't enter service until June 1911; during 1910 she was still under construction.

How much did Olympic and Lusitania each earn annually from Royal Mail contracts?

The mail contracts were given to the lines, not to individual ships.
 
Aug 26, 2009
5
0
71
You're correct. I should have written I am looking for the expected costs and revenues circa 1910 - that is, the business case numbers,
 

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