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Author Topic: Keep Losing Money  (Read 1312 times)

NickvLeeuwen

  • Former member
Keep Losing Money
« on: December 04, 2009, 02:29:15 PM »
I started my airline, Leo Airlines at Perth, Australia. I checked the demands on the route and I fitted it right, but still I am losing money, help! how can I fix this?

I don't have huge expenses on the marketing and stuff, so I don't know what I am doing wrong this time.  :-\


RB211TriStar

  • Former member
Re: Keep Losing Money
« Reply #1 on: December 04, 2009, 02:53:10 PM »
I don't have the ability to see as deeply into your airline as some of the mods do, but i took a quick peek at the publicly available data and a couple things came to mind...
-You look adequately sized for the routes and you're not oversupplied on the market that i looked at
-How are your load factors? Have you considered dropping prices to gain market share?
-Are you doing route advertising? If not, try a campaign for those routes (and in general for that matter)

Just some quick thoughts... hopefully some of it helps.

NickvLeeuwen

  • Former member
Re: Keep Losing Money
« Reply #2 on: December 04, 2009, 03:23:01 PM »
LF is more or less around 60% and I'm doing a national campaign, all prices are already dropped by 10%, do I need to drop even more, will I still make enough profit then?

tofen

  • Former member
Re: Keep Losing Money
« Reply #3 on: December 04, 2009, 05:44:25 PM »
I think your main problem is the choice of aircraft. Those VC10s you fly is both old and inefficient, but still costs quite a lot to lease. If you put them on routs close to there max range, and put a few C-class seats on them, they might make money.

How good is there condition? If they are in bad condition (under 70%), that might be the reason why you need to spend huge amounts of money on marketing to not loose you image.

For the routes you are flying, it seems a B727 or B737 would fit better.

RB211TriStar

  • Former member
Re: Keep Losing Money
« Reply #4 on: December 04, 2009, 06:37:59 PM »
Tofen brings up a good point. I almost considered asking about aircraft choice but I didn't know much about the VC-10 until I did some research.

Try stretching the range of the aircraft and hitting high traffic/dollar destinations like Singapore, Hong Kong, or Kuala Lampur. All should be in range of your aircraft and the longer legs will me more time efficient for you. I checked the traffic and all of those destinations have surplus demand for a VC-10 sized aircraft.

NickvLeeuwen

  • Former member
Re: Keep Losing Money
« Reply #5 on: December 04, 2009, 06:45:09 PM »
Thanks! I will try that!

RB211TriStar

  • Former member
Re: Keep Losing Money
« Reply #6 on: December 04, 2009, 07:22:26 PM »
Good luck and let us know how it works out for you!

Offline Sigma

  • Members
  • Posts: 1920
Re: Keep Losing Money
« Reply #7 on: December 04, 2009, 10:48:51 PM »
Probably the biggest thing to consider is just how long you were operating those routes.

In most cases you don't make money right off the bat.  With a CI of 0 and an RI of 0, it takes consumers time to know you're around as a carrier.  You're going to run some fairly low LFs for a good couple months (game-time) and you're likely to lose money.  It's common.  Your losses should slowly decrease as the weeks go by and you'll move into profitability as your LFs increase.

NickvLeeuwen

  • Former member
Re: Keep Losing Money
« Reply #8 on: December 05, 2009, 10:22:15 AM »
Restarted the airline and now began with 2 B727. Both still operating on the same routes and now I'm starting to make a little profit  ;D

Thanks guys!

 

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