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: Almost Bankrupt  (Read 2315 times)

caglar35

  • Former member
Almost Bankrupt
« on: January 24, 2012, 10:00:49 AM »
Hello everyone. I need some pro suggestion about my financial status. My main base in Morocco in Marakesh and after I opened a base I am crazy about loosing money every week around 1 million. I already got warning if I would not improve my financial status i will bankrupt soon. I have some bleeding old dc 9 series (5 piece) and cannot resign them because i have no money.
Avarage ticket price of my routes 203 dollar and for business class this is 577 dollar.

So any help will be appreciated.

Looking forward

caglar35

  • Former member
Re: Almost Bankrupt
« Reply #1 on: January 24, 2012, 10:05:40 AM »
Here is weekly income statement.

caglar35

  • Former member
Re: Almost Bankrupt
« Reply #2 on: January 24, 2012, 10:07:18 AM »
Here is my monthly income statement.

Online Sami

  • Administrator
  • Members
  • Posts: 14536
    • AirwaySim - Are you the next Richard Branson?
Re: Almost Bankrupt
« Reply #3 on: January 24, 2012, 10:22:27 AM »
With a quick look, nothing strange pops out from the expenses side. So I would focus on improving the incomes. By adjusting ticket prices, putting in more flights if possible etc.

caglar35

  • Former member
Re: Almost Bankrupt
« Reply #4 on: January 24, 2012, 10:58:33 AM »
Yeah, firstly i have reset my ticker prices to the default. I have in total 35 aircraft 30 in my main base and 5 in secondary base. Having an second base really drive some extra expenses that i have not thought? 

caglar35

  • Former member
Re: Almost Bankrupt
« Reply #5 on: January 24, 2012, 10:59:43 AM »
Maybe this also helps to give me a more suggestion..

Offline schro

  • Members
  • Posts: 3068
Re: Almost Bankrupt
« Reply #6 on: January 24, 2012, 02:37:25 PM »
1. Your fuel costs are high  with respect to revenue, but since the other expenses appear to be in line, you've got a revenue/utilization problem more than anything.
2. Close the base and fire the extra staff.
3a. Sort your routes by profitability, from lowest to highest. Select the least profitable route, close it, and replace it with something that flies a shorter distance and has less competition.
3a. Review your longest flights and cut those, replacing with 2 shorter flights where possible. DC9s are much more profitable when you're flying short frequent flights rather than close to their max range.
4. From the looks of your income statement, you were leasing new planes until just recently, so you probably got hit by the staff salary payment to trigger the BK warning. Always make sure to have enough cash on Tuesdays to pay your staff....

I don't have any other visibility into the world, so that's all i've got for now.

Prykee

  • Former member
Re: Almost Bankrupt
« Reply #7 on: January 24, 2012, 03:09:17 PM »
This is my first Airwaysim world after a week in Beginner's World. I made a comparison between your and my airline (Phosphor Ion Bird, Perth, MT6) and it seems Schro has quite some good tips that might make your airline more efficient and also bring your LF over 70%. Another thing to watch is the way your fleet is built up. You have 35 planes over 6 fleet types. I have seen worse, but I wonder about your plans behind the A320/MD-80 aircraft? If that wasn't part of a replacement schedule for your MD fleet, it could be wise to stick to one plane for each purpose. Same for the Fokker 50 vs CRJ100s you have, if you need the range of the CRJ100s, it might just be cheaper to have a few more CRJs to serve the short routes (even though the Fokker props are more fuel efficient) and stay away from adding yet another fleet type. With 3 planes, I wouldn't be surprised if they don't cover the fixed costs for their fleet type.

The single Boeing 737-200Adv and DC-9s you have also really hurt your fleet commonality costs - you pay 15% of revenue on fleet maintenance, I pay around 5%. I admit I fly only Fokker 70/100 and A320 family, but still, you could save a lot of money. Now, you said you don't have money to get rid of the planes, and you're are already 18 million in the red, so maybe starting over is not such a bad idea. I have noticed patience is key in the starting phase!

caglar35

  • Former member
Re: Almost Bankrupt
« Reply #8 on: January 24, 2012, 03:38:58 PM »
Hey guys, I am appreciated to your useful answer. Thanks a lot. For now closing a base cost me more than 6 million which is looks like not a good idea.

For example how much profit is ok for CRJ series? 3000 is ok? My lowest profitable route is makes 3600 with CRJ which seems quite normal or not?
More or less I have filled all the short routes that is possible.

What about prices? Fuel cost rising everyday how should I increase the prices and how frequent?

Offline RushmoreAir

  • Members
  • Posts: 887
Re: Almost Bankrupt
« Reply #9 on: January 24, 2012, 05:35:43 PM »
For example how much profit is ok for CRJ series? 3000 is ok? My lowest profitable route is makes 3600 with CRJ which seems quite normal or not?

CRJ 100/200?
I'm surprised you're making anything at all with those things!! If you survive this, at some point replace the CRJs with ATRs, AN140s, SB20s, or some other prop plane.  Because when fuel hits the roof, CRJs will kill you.  See http://www.airwaysim.com/forum/index.php/topic,29622.html

What about prices? Fuel cost rising everyday how should I increase the prices and how frequent?

Everytime fuel changes by +/- 5%, go to Routes>Price Management and reset to default.  That should keep your profits fairly stable.

Offline schro

  • Members
  • Posts: 3068
Re: Almost Bankrupt
« Reply #10 on: January 24, 2012, 07:18:04 PM »
Hey guys, I am appreciated to your useful answer. Thanks a lot. For now closing a base cost me more than 6 million which is looks like not a good idea.

For example how much profit is ok for CRJ series? 3000 is ok? My lowest profitable route is makes 3600 with CRJ which seems quite normal or not?
More or less I have filled all the short routes that is possible.

What about prices? Fuel cost rising everyday how should I increase the prices and how frequent?

In short, ditch every plane smaller than 100 seats. You WILL bankrupt yourself with CRJ100/200s.

Then, you can backfill the larger planes on the shorter routes....

Prykee

  • Former member
Re: Almost Bankrupt
« Reply #11 on: January 24, 2012, 08:15:31 PM »
I currently have 7 Fokker F70s in my fleet, in addition to a few F100s. The F70s burn 2,000 kg/hr for 70 pax. I saw quite a few people recommending them, but now I am starting to doubt if they weren't talking about its bigger brother..
Does the 'no jets <100 pax' motto always hold true, even in the case of my beloved Fokkers? In that case, I should have probably made that Dash 8 Q400 order instead of 3 shiny A340-500s.

Offline lunchbox

  • Members
  • Posts: 459
Re: Almost Bankrupt
« Reply #12 on: January 25, 2012, 01:18:47 AM »
I currently have 7 Fokker F70s in my fleet, in addition to a few F100s. The F70s burn 2,000 kg/hr for 70 pax. I saw quite a few people recommending them, but now I am starting to doubt if they weren't talking about its bigger brother..
Does the 'no jets <100 pax' motto always hold true, even in the case of my beloved Fokkers? In that case, I should have probably made that Dash 8 Q400 order instead of 3 shiny A340-500s.

Yeah, the F100's they are probably talking about.  I was looking into leasing the F70's, but after looking at the lease price, fuel consumption, the amount of pax carried, it wouldn't of been worth it to lease.  So, I lease just F100's at this point, flying no more than 1100 nm 8).

LeoDario

  • Former member
Re: Almost Bankrupt
« Reply #13 on: January 25, 2012, 01:44:27 AM »
Even though I'm in beginners world I use the TU-204. Although the high fuel consumption and maintainance cost, i get about $280 000 Profit on each plane. It is cheap, only $ 30 000 000 to buy new. And in beginners world fuel is $250 about. I would just say get a cheap plane fly high profit routes, brave fuel and make sure it could hold 140 pax or more. Oh! And business class has a general higher profit than economy.

Offline LemonButt

  • Members
  • Posts: 1895
Re: Almost Bankrupt
« Reply #14 on: January 25, 2012, 02:20:09 AM »
The problem with your airline is simple--poor aircraft choices and too many fleets.  You have a 74% LF, which means you're getting your fair share of passengers.  The A320 and B737 are good choices, but the 20+ year old DC9s and CRJs are killing you.  Not only are they gas guzzlers, but you're increasing your costs on all your other fleets by having them.  The MD80 isn't a terrible choice, but there are more efficient aircraft available, such as the MD90, B717, F100, or even the Tu204.

My advice would be to BK yourself and don't expand to more than 3-4 fleet types for future airlines.  Due to high fuel costs, there are and will be plenty of 737 and other fuel efficient aircraft on the market to pick from.  If you are restarting at the same base, I'd recommend attacking a high density route such as to LHR or FRA where you only have 1 competitor and can take the lion's share of the pax via frequency with a 737 config with business class seats (less airports served = lower marketing costs).  Looking at options, Madrid is a short hop and loading up that route with ATRs (again with business class seats config'd) would be another good strategy (shorter routes = higher profits).  There is no one flying to Brussels either--737 could make bank on this route when restarting.

It looks like you can make a living at your airport if you focus on only competing against airlines on high density routes and serving lower density routes without competition.  Fuel efficiency is key though considering the long distances you'll have to fly for the airports with strong demand.

Offline schro

  • Members
  • Posts: 3068
Re: Almost Bankrupt
« Reply #15 on: January 25, 2012, 03:40:15 AM »
I currently have 7 Fokker F70s in my fleet, in addition to a few F100s. The F70s burn 2,000 kg/hr for 70 pax. I saw quite a few people recommending them, but now I am starting to doubt if they weren't talking about its bigger brother..
Does the 'no jets <100 pax' motto always hold true, even in the case of my beloved Fokkers? In that case, I should have probably made that Dash 8 Q400 order instead of 3 shiny A340-500s.

The tough thing about the economics of the fixed costs that you have to cover in this sim make any plane under 100 seats a rather poor economic choice, especially in the MT era worlds. The Q400 is a decent prop, but really, you've got to understand your route demographics better to make a plane choice...

A340-500s are very niche aircraft that have a very long range and relatively high fuel consumption per passenger. They're not efficient compared to other options on missions up to long haul, and ultra long haul will get you hosed...

Even though I'm in beginners world I use the TU-204. Although the high fuel consumption and maintainance cost, i get about $280 000 Profit on each plane. It is cheap, only $ 30 000 000 to buy new. And in beginners world fuel is $250 about. I would just say get a cheap plane fly high profit routes, brave fuel and make sure it could hold 140 pax or more. Oh! And business class has a general higher profit than economy.

The  757ski (aka 204) can be a good temporary choice when fuel is cheap, however, most all russian planes have their c/d checks get really expensive starting when they're about 7-8 years old. $280k "profit" (assuming you are stating the My Aircraft page view of profit)  is NOT very good for a 150+ seat plane. If you were in any world other than beginner's, you'd likely be needing a bankruptcy advice thread...

The problem with your airline is simple--poor aircraft choices and too many fleets.  You have a 74% LF, which means you're getting your fair share of passengers.  The A320 and B737 are good choices, but the 20+ year old DC9s and CRJs are killing you.  Not only are they gas guzzlers, but you're increasing your costs on all your other fleets by having them.  The MD80 isn't a terrible choice, but there are more efficient aircraft available, such as the MD90, B717, F100, or even the Tu204.

My advice would be to BK yourself and don't expand to more than 3-4 fleet types for future airlines.  Due to high fuel costs, there are and will be plenty of 737 and other fuel efficient aircraft on the market to pick from.  If you are restarting at the same base, I'd recommend attacking a high density route such as to LHR or FRA where you only have 1 competitor and can take the lion's share of the pax via frequency with a 737 config with business class seats (less airports served = lower marketing costs).  Looking at options, Madrid is a short hop and loading up that route with ATRs (again with business class seats config'd) would be another good strategy (shorter routes = higher profits).  There is no one flying to Brussels either--737 could make bank on this route when restarting.

It looks like you can make a living at your airport if you focus on only competing against airlines on high density routes and serving lower density routes without competition.  Fuel efficiency is key though considering the long distances you'll have to fly for the airports with strong demand.

While BK'ing is always the easy way to go, I think the most learning a player  has is when they're trying to dig themselves out of an apparently inevitable bankruptcy. If he BKs now without turning the airline around, he'll not learn some of the fundamentals of the game that you're forced to with a failing company...

Offline LemonButt

  • Members
  • Posts: 1895
Re: Almost Bankrupt
« Reply #16 on: January 25, 2012, 03:58:00 AM »
While BK'ing is always the easy way to go, I think the most learning a player  has is when they're trying to dig themselves out of an apparently inevitable bankruptcy. If he BKs now without turning the airline around, he'll not learn some of the fundamentals of the game that you're forced to with a failing company...

If he's almost bankrupt, I assume he doesn't have the cash to cancel leases to right the ship :)

caglar35

  • Former member
Re: Almost Bankrupt
« Reply #17 on: January 25, 2012, 10:22:34 AM »
So lets say that I have bankrupt but for the restart which aircrafts are best? For short and mid ranges...

caglar35

  • Former member
Re: Almost Bankrupt
« Reply #18 on: January 25, 2012, 10:25:34 AM »
And what do you think to going to green from -18 million is that possible? I have start to profit around 1 million every week i guess. (i am hoping)

caglar35

  • Former member
Re: Almost Bankrupt
« Reply #19 on: January 25, 2012, 04:35:38 PM »
First week without loss, what do you think? Shall I try to be green?

 

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.