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Author Topic: Is overflood part of the game?  (Read 1293 times)

Offline AppleBoss

  • Members
  • Posts: 121
Is overflood part of the game?
« on: January 01, 2010, 01:37:01 PM »
Here is two exemple: Oslo - Bergen and Molde - Bergen (MOL-BGO)
What is the aim of a game were we can put on a 80 passenger /day line one B462 and one MD81 ??????


DenisG

  • Former member
Re: Is overflood part of the game?
« Reply #1 on: January 01, 2010, 02:11:42 PM »
Generally, overflooding as a competitive tool can be implemented in the game as a strategy. Sami confirmed that generally a 250% ratio between seats and demand is acceptable. The idea behind this is to fly a connecting leg from the destination airport that will deliver the profit. In your first example, the other airline is flying around 325% of demand, which is above the line ratio of 250%. In the second example the other player (players?) flies 260% of demand, which I would not call critical.

If you believe that a deliberate market move by a competitor is occuring with the objective to overwhelm your route with a hold back on resources, then you should report the incident to Sami. In the first case with 325% this could be the case.

Denis

Offline Sigma

  • Members
  • Posts: 1920
Re: Is overflood part of the game?
« Reply #2 on: January 01, 2010, 09:22:57 PM »
You have to look at more than just the singular route to understand what is really going on.

In the case of the first one, it appears to me (without being able to see any further details), that it's simply a case of someone needing to utilize a plane a little more.  They've got a large plane, it's in-between long-haul sitting on the ground, so they've made the decision to fly it out to pick up a relatively small number of people just to keep it moving and making some money.  Since costs are so low in this game, it can be cost-effective to go pick up some passengers even if your plane is flying mostly empty.

In the case of the 2nd one, it's harder to say without looking at the flight details.  If that's a single airline with that much capacity, that's a bit high, but not at all outside the realm of profitability.  He could be doing it simply as a deterrent to others attempting to enter that route or perhaps he's doing to to restage aircraft at the next airport for departures from there.  If it's more than a single airline, there's no problem with that at all, that's healthy competition.

Also, you must realize that those charts are only estimates of demand, and actual demand can fluctuate by as much as an additional 50% of what you see if the airlines are particularly well known and the pricing is particularly good.  This means that, in the case of the 2nd route you have there, those planes could easily be flying north of 70% full and being quite profitable.  

Additionally, as games run longer in particular, there's the matter of the choices of aircraft used on a route.  If I know I'm going to keep a plane for the full 20 years, and I know that, over-time that I expect growth on that route (and cheap pricing fuels even faster growth), then I will quite likely decide to put extra equipment on that route for the time being, knowing that in the near future, the demand will grow to suit my supply.  You've got to take equipment when you can get it, and if that means putting a little extra on a route now so that you're not left with unfulfilled demand that you can't satisfy later due to equipment shortages (leaving a window for a competitor) then that's what you're going to do.  It also minimizes the micro-management that plagues larger airlines, as going through and auditing your routes to check their demand growth versus your supply is very time-consuming when you've got a couple thousand of them.

I'm particularly fond of the above strategy because traffic tends to grow with increasing costs (i.e. fuel).   If you can build a profitable airline even when your planes are running a little emptier than you like, then every year as more passengers fly, it's all gravy from there.   And even as costs rise, your load factors are rising right along with them.  It keeps your airline nice and lean.  If, however, you supply to suit demand and your LFs are high, players often get a little overzealous and not mindful of what's going on as they're comfortable from eating off the fat of the good times.  As costs go up, their revenue doesn't change because they have no room to supply additional seats -- if they didn't plan ahead, they've got no new planes on order, and maybe even start losing money so they can't afford them.

Put simply, if you can make an airline that runs profitable at 70% LF, then you're only going to be raking in the cash when it grows to 85%; and even if costs go up, it's only a matter of waiting for your demand to go up year after year or, in a pinch, sell some of your excess capacity on the Used market.  But if you get comfortable at 85%, you might find yourself in trouble when it drops to 70% and/or there's a fuel crisis and  your costs go up.  Your revenue isn't increasing because you've got few to no extra seats and you probably don't want to sell a plane because it only means that many more pax aren't going to get moved, so you lose revenue.
« Last Edit: January 01, 2010, 09:35:28 PM by Sigma »

 

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