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Author Topic: I have an interesting dilemma where growth just stays static...  (Read 1716 times)

L1011fan

  • Former member
I have a nice little airline out of KTUS running routes that have demand of 150-300 pax per day and also have them basically to myself (I think except one, but plenty of room for me). I have 2 MD-90's which I thought would be economical. Routes are varied such as KTUS-KLAS and KTUS-KIAH to name a couple. I am always hovering between -100,000 to + 100,000 moneywise. Has anyone else experienced this before? How do I get this airline moving? The load factors are pretty good and I have messed with with fares a couple of times both up and own, yet earnings never change. Whats up? Any ideas?  ??? P.S. Other routes that are good for me are still available if I can get this thing jumpstarted. Hate to give up! :-\
« Last Edit: April 30, 2011, 01:32:20 AM by L1011fan »

Offline JumboShrimp

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Re: I have an interesting dilemma where growth just stays static...
« Reply #1 on: April 30, 2011, 01:44:48 AM »
It's not that you are doing anything wrong, but you just need a few more aircraft for the airline to be self sustainable.  There is some overhead that kicks in when you start an airline, and you need profit from flights to be higher than this initial overhead.

Offline JumboShrimp

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Re: I have an interesting dilemma where growth just stays static...
« Reply #2 on: April 30, 2011, 01:46:34 AM »
Also, as your RI builds up, and CI goes up somewhat, you will have increased LFs, and more profits from existing flights.

L1011fan

  • Former member
Re: I have an interesting dilemma where growth just stays static...
« Reply #3 on: April 30, 2011, 05:38:19 AM »
Ok, I'll just let it go and see what happens. Thanks for the encouragement! :)

Offline Minto Typhoon

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Re: I have an interesting dilemma where growth just stays static...
« Reply #4 on: May 01, 2011, 04:22:39 PM »
Stay with the MD-90 - dont be tempted to add a second aircraft type till you have a dozen aircraft.

Jps

  • Former member
Re: I have an interesting dilemma where growth just stays static...
« Reply #5 on: May 01, 2011, 05:34:24 PM »
Also, max out your current routes before adding new ones. Frequency provides higher LF pax numbers, thus higher income, whereas more destinations means higher marketing and overhead costs.
« Last Edit: May 02, 2011, 11:31:06 AM by Jps »

Offline JumboShrimp

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Re: I have an interesting dilemma where growth just stays static...
« Reply #6 on: May 01, 2011, 10:59:33 PM »
Also, max out your current routes before adding new ones. Frequency provides higher LF, thus higher income, whereas more destinations means higher marketing and overhead costs.

You need to clarify these statements.

Frequency does not provide higher LF in all cases.  You can have higher number of pax vs. competition with higher frequency, but that's about it.

Maxing out one route is not the best idea either (just my opinion).  Yeah, you save on marketing costs, but that is only 1 variable supporting this strategy.  There are others against it.  Maxing out 1 route while RI is low will lead to low LFs (until the RI is high enough).

Jps

  • Former member
Re: I have an interesting dilemma where growth just stays static...
« Reply #7 on: May 02, 2011, 11:39:32 AM »
You need to clarify these statements.

Frequency does not provide higher LF in all cases.  You can have higher number of pax vs. competition with higher frequency, but that's about it.

Maxing out one route is not the best idea either (just my opinion).  Yeah, you save on marketing costs, but that is only 1 variable supporting this strategy.  There are others against it.  Maxing out 1 route while RI is low will lead to low LFs (until the RI is high enough).

Corrected.

Furthermore, I meant maxing out his current routes, which there seems to be at least 3. I support opening a few routes at startup, but then serving those to max until opening new ones.
However, if you started with 3 daily flights in one route, wouldn't your RI rise much faster than if you flew 3 different routes once a day, thus leading to higher LFs faster in the route that's flown 3 times a day?
Also, if the route supports it, is there actually a difference in initial LFs if you fly 3 times one leg compared to flying 3 legs once a day? Eg, if you fly a 2000 demand route 3 times a day with 737, do you get, say, 3*100 pax, or less, when you would get 100 pax from each flight only flown once a day?

Offline alexgv1

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Re: I have an interesting dilemma where growth just stays static...
« Reply #8 on: May 02, 2011, 11:43:01 AM »
However, if you started with 3 daily flights in one route, wouldn't your RI rise much faster than if you flew 3 different routes once a day, thus leading to higher LFs faster in the route that's flown 3 times a day?

Yes RI increases more quickly on routes flown with more frequency.
CEO of South Where Airlines (SWA|WH)

Offline JumboShrimp

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Re: I have an interesting dilemma where growth just stays static...
« Reply #9 on: May 02, 2011, 12:57:44 PM »
Yes RI increases more quickly on routes flown with more frequency.

Have you tried it?  I have not specifically tested it but from casual observation, RI seems to go up by 3.5% with 7 flights a week and not any faster with more flights.

Offline JumboShrimp

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Re: I have an interesting dilemma where growth just stays static...
« Reply #10 on: May 02, 2011, 01:03:32 PM »
Corrected.

Furthermore, I meant maxing out his current routes, which there seems to be at least 3. I support opening a few routes at startup, but then serving those to max until opening new ones.
However, if you started with 3 daily flights in one route, wouldn't your RI rise much faster than if you flew 3 different routes once a day, thus leading to higher LFs faster in the route that's flown 3 times a day?
Also, if the route supports it, is there actually a difference in initial LFs if you fly 3 times one leg compared to flying 3 legs once a day? Eg, if you fly a 2000 demand route 3 times a day with 737, do you get, say, 3*100 pax, or less, when you would get 100 pax from each flight only flown once a day?

Suppose you have 3 cities, each with 300 pax demand, and no competition.  My approach would be to fly 1x per day to each one.  When you have a supply of 100 and demand is 300, you right away have a decent LF.  And with decent LF (at low RI), I would fly 1x per day to each of the 3 cities, then when next aircraft becomes available, I would add a second flight (when RI is already built up somewhat on each of the 3 routes), and later I would add 3rd flight.

If you compare it to sending 3 flights to only 1 city, and supplying 300 our of 300 demand, your initial LF will be lower, and RI will not rise 3x as fast as with 3 flights.  When going to the second city, the same issue...

Offline alexgv1

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Re: I have an interesting dilemma where growth just stays static...
« Reply #11 on: May 02, 2011, 01:42:00 PM »
Have you tried it?  I have not specifically tested it but from casual observation, RI seems to go up by 3.5% with 7 flights a week and not any faster with more flights.

Yes I've had airlines where I'd start up flying some routes once per week, and others with multiple flights per week.

Without any route marketing, the ones which I flew more often went up faster and reached 100 more quickly.

I imagine this is because I flew them more frequently, I can't think of any other factor that could affect it.

and RI will not rise 3x as fast as with 3 flights.

That's true, it rose only marginally more (e.g. got to 100 whilst other routes were on 80), definitely not three times faster.
CEO of South Where Airlines (SWA|WH)

Offline Minto Typhoon

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Re: I have an interesting dilemma where growth just stays static...
« Reply #12 on: May 02, 2011, 02:03:52 PM »
Have you tried it?  I have not specifically tested it but from casual observation, RI seems to go up by 3.5% with 7 flights a week and not any faster with more flights.

one daily or five daily doesnt seem to make any difference.

Jps

  • Former member
Re: I have an interesting dilemma where growth just stays static...
« Reply #13 on: May 02, 2011, 02:04:20 PM »
If you compare it to sending 3 flights to only 1 city, and supplying 300 our of 300 demand, your initial LF will be lower, and RI will not rise 3x as fast as with 3 flights.  When going to the second city, the same issue...

Of course you won't get all the demand on board when you start. That's why I was talking about a route with 2000 demand, a lot more than I would carry initially.
So, suppose I have 4 destinations: 3 with 300 demand, 1 with 2000 demand. How do the LF's act now with the setting of my previous example? Ie. will I get 100 pax on board for each flight to 2000-demand destination, or will it be higher/lower because of more frequency compared to other destinations?
As time passes, the 2000-demand route should have higher LF than others, but as mentioned, not by much. But, I'm interested in the beginning, the first flights.

 

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