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Author Topic: Starter Suggestions  (Read 884 times)

mean123

  • Former member
Starter Suggestions
« on: August 01, 2012, 10:07:21 PM »
Hello Guys,

I am relatively new to this, I have bankrupted already due to large fleet differences, so have gone for a new strategy this time round. I just wanted to hear how other people have started their airlines who have been very succesful.

I chose an airport with mudium - high pax demand, it was only me based there at the time of choosing. my flights were 90% full thanks to the route planner. I was making 200+ flights a week and was making profit but not huge, i was also using leased aircraft. My problem was adding different aircraft type to the mix. But within a few days i saw some companies worth $100Million. I was wondering how this is possible and if i could get some tips on how to make this as succesful as possible.

There is not enough money at the start to purchase a decent economic aircraft brand new yet i found some airlines with 80 brand new planes that they own outright. Also cant negotiate on price with the used aircraft market or make monthly payments.

Any help would be greatful.

Thanks Everyone.
Gary

eleventy40

  • Former member
Re: Starter Suggestions
« Reply #1 on: August 01, 2012, 10:23:07 PM »
Hi, I might not be able to give advice from many years of experience but I do have some experience and a good knowledge of the economical backings of the game. The route that many of those people with 100 new planes is very risky because they can suddenly find themselves facing overexpansion and the rapid spike in fuel prices and find themselves in an uncomfortable position. Most of their planes are leased new, which means they must keep them a minimum of 1 year if they chose a 5 year lease, from where they must further pay 50% of the remaining lease. Sometimes it pays off tremendously, but until about the 5th year you can't really know. I myself am not one to try too much risk, but I do like expansion with a reasonable amount of growth, slower than these other methods but much more stable and safe financially. Most of the newer models won't be around until about the 3rd or 4th year on the used market, as this is when many airlines begin to drop out from disinterest or other reasons. I would definitely advise keeping one fleet or two fleets max, having one fleet of the large 100+ seat aircraft, and another with the smaller capacity, around 75. This will do much more to increase your CI as well, which will give you an advantage over competition. It doesnt have to be new to be economically efficient, try to start with the older planes and slowly invest in the newer fleets. For example, I am flying 727s as my main fleet, I have 5 of them with an average age of around 17 or 18 years, I have just started two more fleets with brand new planes, the 737-300 and MD-90, however, I must admit that I will need to get rid of the MD-90 fleet more than likely for economic reasons. Be sure to always have some form of advertising going on and have good route images, growth will be slow at first so be sure to have some extra money around in case your routes are unprofitable in the beginning. I hope this might help, you can reply on this or send a message if you wish to discuss tactics or anything.

Online JumboShrimp

  • Members
  • Posts: 5992
Re: Starter Suggestions
« Reply #2 on: August 01, 2012, 10:57:36 PM »
Hello Guys,

I am relatively new to this, I have bankrupted already due to large fleet differences, so have gone for a new strategy this time round. I just wanted to hear how other people have started their airlines who have been very succesful.

I chose an airport with mudium - high pax demand, it was only me based there at the time of choosing. my flights were 90% full thanks to the route planner. I was making 200+ flights a week and was making profit but not huge, i was also using leased aircraft. My problem was adding different aircraft type to the mix. But within a few days i saw some companies worth $100Million. I was wondering how this is possible and if i could get some tips on how to make this as succesful as possible.

There is not enough money at the start to purchase a decent economic aircraft brand new yet i found some airlines with 80 brand new planes that they own outright. Also cant negotiate on price with the used aircraft market or make monthly payments.

Any help would be greatful.

Thanks Everyone.
Gary

If you restarted, you will have to be very patient now, because we are entering aircraft drought.

As far as player owning 80 brand new aircraft, that is not the case.  The top player in fleet has 80 mostly used (not new) aircraft leased (not owned).

As far as companies being worth 100 millions, the company value figure at this stage of the game is meaningless, since most of the airlines are investing all their cash into growth (leasing more aircraft, buying slots etc).   Companies that are really top companies in the game may be worth negative 100 million at this stage of the game...

claudietto

  • Former member
Re: Starter Suggestions
« Reply #3 on: August 02, 2012, 02:01:22 AM »
H The route that many of those people with 100 new planes is very risky because they can suddenly find themselves facing overexpansion and the rapid spike in fuel prices and find themselves in an uncomfortable position. Most of their planes are leased new, which means they must keep them a minimum of 1 year if they chose a 5 year lease, from where they must further pay 50% of the remaining lease. Sometimes it pays off tremendously, but until about the 5th year you can't really know.
Can you please explain this better? Not sure I got what you meant to say...
Thanks!

Offline ARASKA

  • Members
  • Posts: 1336
Re: Starter Suggestions
« Reply #4 on: August 02, 2012, 02:04:42 AM »
If you restarted, you will have to be very patient now, because we are entering aircraft drought.

If your like me and spend 6 hours a day on AWS even when on vacation, you may be able to get some A320s  :o  ;D

eleventy40

  • Former member
Re: Starter Suggestions
« Reply #5 on: August 02, 2012, 03:47:08 AM »
Claudietto, what I was trying to say is that if somebody had done that this early in the game, they would be facing massive debts or very high negative company values until their profits really increased unless they can micromanage everything very well and stay on top but in any case it it a huge risk to buy a lot of planes and expand massively so quickly. I hope that explains a little better or if it was something else just ask on here or send me a message.

Offline Sanabas

  • Members
  • Posts: 2161
Re: Starter Suggestions
« Reply #6 on: August 02, 2012, 04:56:29 AM »
Hello Guys,

I am relatively new to this, I have bankrupted already due to large fleet differences, so have gone for a new strategy this time round. I just wanted to hear how other people have started their airlines who have been very succesful.

I chose an airport with mudium - high pax demand, it was only me based there at the time of choosing. my flights were 90% full thanks to the route planner. I was making 200+ flights a week and was making profit but not huge, i was also using leased aircraft. My problem was adding different aircraft type to the mix. But within a few days i saw some companies worth $100Million. I was wondering how this is possible and if i could get some tips on how to make this as succesful as possible.

There is not enough money at the start to purchase a decent economic aircraft brand new yet i found some airlines with 80 brand new planes that they own outright. Also cant negotiate on price with the used aircraft market or make monthly payments.

Any help would be greatful.

As others have said, nobody in MT owns 80 planes already. After just over a year of gametime, 11 airlines have more than 60 planes, and none of them own a single one. Some of the slightly smaller airlines might own a few of their planes, but that's it. There are 5 that have more than 80 new planes on order.

There are two options people used at the start for really rapid, aggressive growth. Either to lease big & cheap aircraft that have business class seats, and put them on big longhaul routes, or lease really cheap planes (722 & 732) and get lots of them, putting them on short, huge routes. Some of the people who did that will continue to grow, some of them will go spectacularly bankrupt in a few years.

I had a quick look at your MT airline, I can see some basic stuff you could improve (particularly turn times). You've picked a relatively large airport with 3 existing airlines, that means slots will get expensive quickly, and with 50 seaters, you'll struggle to earn enough money, so slot costs will really slow you down. Because we're now 1 year in, used planes are really hard to find, apart from a few families of very old planes (f27, DC-9 look like about it), and the <30 seat stuff. From where you are now, you can definitely end up the biggest airline in your HQ, but it will be a long challenge. Depends how much of a challenge you want, and what sort of airline you're looking to build, but you may want to think about starting over somewhere slightly smaller, without so much competition.

If you want to put in a mentoring request for your JA or BW airlines, I can pick that up and go over stuff in more detail. Don't know how successful those are, but one option with those is to BK and practice trying to do an aggressive, rapid startup there, where planes are more available and the competition isn't as cut-throat.

mean123

  • Former member
Re: Starter Suggestions
« Reply #7 on: August 03, 2012, 04:43:02 PM »
JS, if you negative 100's of millions doesn't the bank take your airline? I was too worried of too negative company value thinking the bank will take my airline.

With the new airline I manage at ORY it is making a 1.5M - 1.8M a week profit, it is much smaller than my previous but making profit. All my aircraft are leased and cannot afford to buy a leased aircraft with 75-100 pax capacity which is what I am looking for and am too worried that if I keep leasing aircraft I will sink in the leasing costs. Is it risky to lease more aircraft or do you think I should go for it?

At the moment my 2 fleets are 732's and DHC - 8's, could I improve on this? I use the 732's on routes with little or no competition and a medium to high demand and DHC - 8's on routes where I have decent competition but with high demand.

Is there a low risk method for me to produce faster growth?

There are very few routes within a 1000NM radius from my base now without high competion, should I go ahead and fly those routes now even if they are slightly oversaturated or should i wait for a CI of 100 before I go ahead and do that? They will already have the advantage of the high RI i suspect putting me in a dangerous position.

Thanks
Gary

Offline FlyTO

  • Members
  • Posts: 260
Re: Starter Suggestions
« Reply #8 on: August 03, 2012, 08:41:51 PM »
From what I found out compared to previous worlds, it is a good thing to open many routes ONLY ONE time when you start INSTEAD of just flying to one or two destinations more than ONE time. The reason for this is your RI grows at a steady pace of around 4 or 5 with advertisements each week.

When you are starting, try looking for HIGH DENSITY routes of over 1000 demand or at least 500 demand. The reason for opening up HIGH DENSITY routes is because when you're starting off, your airline can only attract at most 20% of the actual demand. For example having a large aircraft of around 150seats flying a route with a demand of 1000. 20% of 1000 is 200, therefore your load factors will not suffer too much because your plane is still under-serving the adjust demand of a low RI. On the other hand, if you open up routes with under 300 demand, I would advise to open those later once your airline is making a steady profit. You will see losses opening these routes because of low load factors. For example, a 150seats plane flying a 300 demand route. 20% of 300 is 60. So at most you'll be having 60/300 customers available, and filling only 60/150 seats on your plane, about 40%.

In my opinion, it is okay if there are already competition there. For me, a route with demand of 1200 and the supply is already around almost 3000, my one or two daily flights still average 90% LF and high profits.

brique

  • Former member
Re: Starter Suggestions
« Reply #9 on: August 03, 2012, 09:58:26 PM »
Agree strongly with all flyTO says : look for those routes he describes and take full advantage of the base 'RI' effect : it does work very well for good early LF's, even with competition, then once your 'true' RI is climbing and attracting a higher % of the demand, you can add in new flights or, another strategy : just hike your prices, there is no 'death cliff' effect now, so as long as you keep your supply below your demand (adjusted for RI) then you still keep good LF's and higher per-flight revenues for the same costs.

Offline Troxartas86

  • Members
  • Posts: 877
Re: Starter Suggestions
« Reply #10 on: August 04, 2012, 07:42:44 AM »
I've always done well starting wherever there is decent demand and no other airlines. Twice I based in Nigeria and twice in Libya. When I wanted to try a legit Soviet airline with expensive Soviet planes, I went for the domestic-only Moscow-Domodedovo instead of then crowded Sheremetyevo with the only international routes. Here in MT7 my challenge is basing in the most isolated country of all: French Polynesia. Demand may be terrible within the 0-5000NM range but I am one of those few owners of multiple planes, one of them new. (two total)

 

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