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Author Topic: Expert Advise on Strategy, Please ?  (Read 2414 times)

Kastor

  • Former member
Expert Advise on Strategy, Please ?
« on: January 11, 2009, 10:54:44 PM »
Hi, I am a newbie and I am running my first very unsuccessful airline with -2.5 mln company value and I can not buy any aircraft so I can not try out a new strategy. I don't know if I manage to get to black numbers before demo ends, so I am asking.

Probably my mistake was to lease a 102 seater jet that was too much fuel consumming and after a week I leased 707-320C that is even more fuel consuming.

Should I have rather leased two 50 seater turboprops of the same type instead of those jets and take 2 or 3 short regional routes with good demand for each of them ?

As a curiosity, there was an airline in Poland that also started with a few B734s on regional routes and it is no more on the market, I just reminded myself.  ;D

Will appreciate the advice :-)
« Last Edit: January 11, 2009, 10:58:47 PM by Kastor »

Offline Seattle

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  • Posts: 2791
Re: Expert Advise on Strategy, Please ?
« Reply #1 on: January 11, 2009, 10:58:03 PM »
Try to get a 727/737/A320/DC-9/MD80/Tu-154/Tu-134/717/Fokker 100 for your first palne....g2g now, maybe someone else can give yo advice.
Founder of the Star Alliance!

Dazwalsh

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #2 on: January 11, 2009, 11:12:54 PM »

the 707 was probabaly very very old and this leads to huge maintenance and fuel bills, this is what is crippling you now, you are best off declaring bankrupcy if this aircraft isnt bringing in any money.

start fresh and start small, turboprops/ small jets to local airports within 200/300 nm away should get you started, make sure the aircraft are not too old (i try to keep my fleet less than 12 year old). also check the condition of the aircraft, it should be over 70 percent to help stop technical problems affecting delays and cancellations.

keep an eye on your company image, this is an important aspect of the game, always have a marketing campaign in place and do your best not to let this drop below zero.

once these aircraft have started to make a profit you can either keep going with the same sized aircraft or think about something bigger like a Boeing 737/ Airbus A320. These planes will bring in a lot more profit but with added expenditure so make sure the routes you place them on have enough demand. try to have as many flights a day out of all your fleet, (all mine fly from between 5 and 6 in the morning and dont stop until midnight).

this is just a basic overview of what i personally would do, each airport requires a different strategy, others might be able to go into greater depth


blumage

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #3 on: January 11, 2009, 11:17:22 PM »
another tip to squeeze as much as possible flights into a plane's schedule for shorthaul choose aircraft with relatively short turn around. If im not mistaken the 707-320 had a 90 min turn around to reach a 0% delay probability. There are planes that can carry a good amount of passengers for less time. Btw also take into consideration fleet commonality. Use same models of airplanes .

Kastor

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #4 on: January 11, 2009, 11:24:12 PM »
Thank you very much guys.  :)
I take care of my company image and have it over 50 now. 3x B check month by month and my A/C are nearly 100% good, but I am still -2.5 mln in cash. However I have a good position on 2 routes done from the first day, one of them has LF almost 70% and giving profit, another on the same A/C also giving profit with LF 57%, but can't get into profit area on the third route that is making heavy loss because of B707-320C flyin' JFK-LAX. Now I can only sit and wait so I am considering starting over enriched with your advice.
« Last Edit: January 11, 2009, 11:27:21 PM by Kastor »

blumage

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #5 on: January 11, 2009, 11:28:13 PM »
just another thing. REading your reply i was having this doubt. how many times do you fly JFK-LAX? You should at least provide a 3 times a week frequency so people will choose to fly with your airline.Check also that route image.

Offline Sami

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Re: Expert Advise on Strategy, Please ?
« Reply #6 on: January 11, 2009, 11:28:58 PM »
if you are already 2.5m in minus, you gotta start cutting back costs. You are also loosing money every week more when taking a look at your airline here.

As you can see from aircraft statistics already the B707 is a BIG problem. Even the routes without marketing, staff fees etc are not getting money. Just flying the route causes you to LOSE money all the time. So ground that one fast. It just uses so massive amounts of fuel that it needs a higher loadfactor to be profitable and you cannot afford it. You could test it on shorter routes if that helps, doubt it though.

737 is doing fine on the other hand. But it could do a lot better if it had one extra daily rotation, there's many hours of slack time in the schedule! And you could try raising the route prices too there.

Kastor

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #7 on: January 11, 2009, 11:35:18 PM »
All my routes are 7 days a week services. On the JFK-LAX I have one competitor only and the demand is huge, wondering why can not achieve better LF, I have very good punctuality on that route and company image over 50.
The 737 is doing really good, but has too short range to put it on the LAX route.
I considered to fire some staff but it told me that I will loose company image if I do it, so I left them in peace. (what a nice guy I am  ;D)

I raised the prices on the JFK-LAX route a month ago and the LF dropped suddenly by 10%
And on top of that I have a marketing radio/billboard/newspaper permanent nationwide.
« Last Edit: January 11, 2009, 11:40:39 PM by Kastor »

Talentz

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #8 on: January 12, 2009, 04:31:43 AM »
Hiya! How are you?

Advise huh? Well..

I can start by looking at your aircraft and your route choices for that aircraft.

707 is a long haul aircraft. So, by choosing it, you should have done something like JFK-LHR 7x weekly. 707s are very inefficient for "short" domestic routes. Even cross country is a waste of money. Something like 727 or 757 is great for cross country.

So that, is probably why your in the hole. Though, thats not to say 707 is worthless. It is not a bad aircraft, you just need to put it on a route that can best utilize the aircraft. For short domestic routes, 737 or A320 is much more efficient.

Other then that, as far as strategy goes, it just depends on the aircraft you have. I would suggest doing some long haul. JFK is the top international airport in the US. So use that to your advantage.

Hopefully this helps.

Talentz

Offline Sundaypilot

  • Members
  • Posts: 468
Re: Expert Advise on Strategy, Please ?
« Reply #9 on: January 12, 2009, 06:23:23 AM »
All my routes are 7 days a week services. On the JFK-LAX I have one competitor only and the demand is huge, wondering why can not achieve better LF, I have very good punctuality on that route and company image over 50.
What is your route image on JFK-LAX route?
It takes long time before your route image is up, and before that you cannot get high LF. No matter how good your company image or how big the demand is. You can make route image better with a marketing campaign, but even with it it takes many months to build up.

Try to optimize your fleet usage. See the picture, that's how your schedules should look like.
Aircraft make money when they fly, so fly to the max...
(but keep the turnaround times long enough, so your image doesn't drop because of delays)



[attachment deleted by admin]

Kastor

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #10 on: January 12, 2009, 09:29:01 AM »
Thank you guys for the advice. I can not see the route image in the demo game, so I can only relay on company image and this one grown up to 52 over night, and my money dropped to -3,6 mln. I thought the time would work for me, so I decided to postpone some suggested decisions to the morning, that is now, but when I woke up I see that situation is very bad, I have no move on changing the aircraft (to terminate lease it cost overs 3 mln if I wanted to get rid of 707) so it must fly. I can't either buy one due to heavy debt.
the only good route I have is JFK-ORD which I make LF 70% on and it earns good money for me, but 707 eats all that and much more.

Aware of that all and all the mistakes I made, I decide to declare the bancrupcy and start over taking all your advice regarding choice of aircraft into considerations to make more successful airline. I will have possibility to try different strategies before I start a full game, now I can just sit and look :(.


Dazwalsh

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #11 on: January 12, 2009, 02:11:39 PM »
yeah just dont pick up the 707 again, haha go for a 737-300 or if you want something bigger i suggest a 757/767, far more fuel efficient and maintenance costs are also way way lower

Kastor

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #12 on: January 12, 2009, 02:16:41 PM »
Yeah I know now, thanks a lot Dazwalsh  :)
Previously I made that mistake that didn't look at the fuel consumption at all !!

Jps

  • Former member
Re: Expert Advise on Strategy, Please ?
« Reply #13 on: January 12, 2009, 04:16:08 PM »
One thing that could have helped you, might have been to change the aircrafts flying the route, so put the 707 on the JFK-LAX route, which already has a good route image, and then the other aircraft to the route the 707 was flying before. of course, it's be even better, if you could have both aircraft slying the same routes, so you'd get the route image up faster (but, this is only, if the demand of that route is more than the capacity of those planes).

 

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