AirwaySim
Online Airline Management Simulation
Login
Username
Password
 
or login using:
 
My Account
Username:
E-mail:
Edit account
» Achievements
» Logout
Game Credits
Credit balance: 0 Cr
Buy credits
» Credit history
» Credits FAQ

Author Topic: Funny marketing strategy...  (Read 1030 times)

GDK

  • Former member
Funny marketing strategy...
« on: May 02, 2010, 10:17:40 AM »
I feel very uncomfortable when I saw a route with average demand of 600 pax was assigned a bunch of flights providing over 1200 seats per day. Curiously, there are only 2 airlines flying that route and 1 of them providing 1080 seats per day.

I checked back some other routes near my home base and found the same scenario on many routes. What is happening here? Don't the player have some basic common sense? What for making 1200 cheese cakes when you know that only 600 will be sold? There are still many empty routes available! Please don't make it unrealistic and you'll soon go for bankruptcy.

Offline Wing Commander Chad Studdington

  • Members
  • Posts: 1047
Re: Funny marketing strategy...
« Reply #1 on: May 02, 2010, 10:47:14 AM »
I wouldn't complain. If airline are looking to do the legwork for you and force themselves down Bankruptcy Road then so be it.  ;D

Offline Sami

  • Administrator
  • Members
  • Posts: 14544
    • AirwaySim - Are you the next Richard Branson?
Re: Funny marketing strategy...
« Reply #2 on: May 02, 2010, 10:50:02 AM »
Which routes these are?  Since the demand values what YOU see may be not accurate if your staff is not fully motivated etc.

GDK

  • Former member
Re: Funny marketing strategy...
« Reply #3 on: May 02, 2010, 01:29:13 PM »
WMKk-WIII demand 290, seat available 560.
WMKK-VTBD demand 690, seat available 1272.
WMKK-WSSS demand 2130, seat available 3262.

Demand do fluctuate a little but never go as high as the number of seat available.

Staff efficiency 99.9%

Offline Frogiton

  • Members
  • Posts: 784
Re: Funny marketing strategy...
« Reply #4 on: May 02, 2010, 05:47:56 PM »
My peeps say 3200 for the Lumpur -> Singapore route too.
No replacement for displacement

Offline Sigma

  • Members
  • Posts: 1920
Re: Funny marketing strategy...
« Reply #5 on: May 02, 2010, 06:58:19 PM »
1>  The problem is, the demand in the charts isn't actual demand.   So, it isn't telling you that you're only going to sell "600 cheesecakes" so you better not make any more than that.  It's telling you that you're only likely to sell somewhere around 600 cheesecakes at full price.   In reality, you can actually achieve 150% of the displayed demand with sufficient marketing efforts and price reductions.  So even if 2 airlines are putting 100% demand each on a route, doesn't mean they're each flying their planes half-empty -- it's quite possible, likely even, that they're actually more like 60-70% full which is a very profitable situation to be in.  

2>  In real-life, do you think an airline only opens a route somewhere because he thinks a whole lot of people want to go somewhere and the existing carriers aren't offering enough seats?  Every single day new routes are opened in real-life even when the current carrier on that route isn't filling up their planes.  And that's a fact that applies to everything from airline carriers to TV producers to apple farmers.  They do it not necessarily because there are people who aren't getting XXXXX product (i.e. unsatisfied demand), they're doing it because they think they can perhaps draw some new people to the market but more importantly steal some away from the current guy who's making good money having the market all to himself and, perhaps eventually, run that original company out of the business and then they'll have it to themselves.  

2A>  When Southwest Airlines opens a new route from, say, Denver to Omaha they're not doing it because there's people sitting in Omaha waiting to go to Denver that can't manage to get onto a Frontier flight.  They're not doing it because it's the absolute best route they could put that new plane they've got on to keep it the most filled.  They're doing it as part of a larger strategy that extends beyond simply filling up a plane -- in this case, they'd do it to stifle Frontier's monopoly on that route, limit Frontier's ability to make money on that route, and therefore hinder Frontier's growth in other markets.  You've got to look at a much bigger picture than simply how full one's planes are.

3>  Just because there are other routes that are open doesn't necessarily mean they're "better".  Especially not long-term.  Route density is a huge deal.  When you setup a new destination you have to hire dozens of new people to work that destination and you have to extend your Marketing campaign to a new destination (that alone can mean hundreds of thousands per week -- depending on the aircraft you're flying and the amount of pax there is, it can actually cost MORE to run the route than you get operating it).  These costs are overhead costs that are not covered in your Route or Plane profitability figures, which are gross profit only, not net.  In the end, it may (depending on a lot of factors) actually be better in terms of NET profit to fly a plane at 60% full to a destination you already fly to, than one at 90% full to a brand new destination.

4>  For the same reasons as #3, it is better long-term to ensure that your competition doesn't secure these high-density, high-margin routes all for themselves while you go off and fly to 10 times the destinations just to secure the same number of pax.  Long-term, it is a better strategy to limit your competitions' load factors on these routes, rather than conceding the route to them and going to some new route for yourself.   Otherwise, in the long-term, your competition is going to have a significant cost advantage over you -- they'll ultimately expand quicker and, when/if they go after your routes they'll be able to charge a lower price and remain profitable than you'll be able to and you'll ultimately not survive.
« Last Edit: May 02, 2010, 07:05:17 PM by Sigma »

Offline Sami

  • Administrator
  • Members
  • Posts: 14544
    • AirwaySim - Are you the next Richard Branson?
Re: Funny marketing strategy...
« Reply #6 on: May 02, 2010, 09:07:42 PM »
mmmmmm... cheesecakes.  ..600 of them!



..anyway, the true demand for wmkk-wsss is indeed around 2400 a day. But I do not see any real oversupply there.. about 3350 seats per day on average. The guys are prob. getting some 60% LF's there and I would see no problem in pushing my airline to that route too after the financials are secured.


GDK

  • Former member
Re: Funny marketing strategy...
« Reply #7 on: May 02, 2010, 10:28:56 PM »
mmmmmm... cheesecakes.  ..600 of them!



..anyway, the true demand for wmkk-wsss is indeed around 2400 a day. But I do not see any real oversupply there.. about 3350 seats per day on average. The guys are prob. getting some 60% LF's there and I would see no problem in pushing my airline to that route too after the financials are secured.



The highest LF I have ever see on that route 2500 per day, lowest is 1920 :-\... Going to grow to 4000 available seat soon, I guess...

 

WARNING! This website is not compatible with the old version of Internet Explorer you are using.

If you are using the latest version please turn OFF the compatibility mode.