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Author Topic: Time for another experiment  (Read 5886 times)

Offline Sanabas

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Time for another experiment
« on: December 22, 2012, 07:46:58 AM »
I want to see if I can build an airline of 9 seaters. Whether it's possible or not, I have no idea...

Offline Sanabas

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Re: Time for another experiment
« Reply #1 on: December 22, 2012, 08:34:47 AM »
Hmmm. 88 staff for 18 seats. Every single route over 100 NM marked as 'this plane is too small'. One route of 120 pax, one of 20 under 100 NM.

With 6 daily flights, ground handling/landing/etc fees are almost triple what fuel is, even at $1000+

Based on that, a lot of short flights probably isn't the best way to go.

Rip out the 9 high density seats, put in 8 standard ones, and the range is 1320 NM. That means tech-stopping longhaul routes are doable.  ;D

Offline Sanabas

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Re: Time for another experiment
« Reply #2 on: December 22, 2012, 08:44:41 AM »
With 6 daily flights, ground handling/landing/etc fees are almost triple what fuel is, even at $1000+

Based on that, a lot of short flights probably isn't the best way to go.

Actually, that might be wrong. Fees are going to be pretty similar regardless of length. Depends whether revenue minus fuel is more or less for a longer flight. Which may or may not be the case. Need more data.  :laugh:

brique

  • Former member
Re: Time for another experiment
« Reply #3 on: December 22, 2012, 09:49:02 AM »
Eeek... 9-seaters...  go for it!

Staff levels are the booger though ; I'm running E110's in DOTM5 and have 509 staff reqd for 10 planes, inc 9 high and 15 middle managers... I'm too scared to count the route strategists :(

So I reckon you'll end up with staffing figures close to that for a similar number of 9-seaters ; Ground handling, fees and fuel are at least somewhat related to aircraft size/pax flown, but when your entire fleet would need to make 10 flights just to move the staff, something needs fixing... *nudges Sami

Offline Sanabas

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Re: Time for another experiment
« Reply #4 on: December 22, 2012, 12:35:53 PM »
Eeek... 9-seaters...  go for it!

I'd lease the ones you have on sale, if not for the fact c-checks cost more than a 12 month lease, and need to be done up front.

brique

  • Former member
Re: Time for another experiment
« Reply #5 on: December 22, 2012, 12:42:49 PM »
The landscaping department will be most upset to lose such fine water-feature infrastructure, but check your PM's... :)

Offline Sanabas

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Re: Time for another experiment
« Reply #6 on: December 22, 2012, 01:37:33 PM »
Going to get some interesting data, at the very least.

Overhead, with just 2 planes:

Staff salaries: 88 staff, 289k/month.
Fleet commonality, planes: 61k/month.
Fleet commonality, engines: 117k/month
Insurance: 11k/month


That's 478k/month, even without marketing, line maintenance, heavy maintenance, leasing costs. I have 18 seats. I need to make roughly $900/day/seat, just to break even.

I have the default ticket price on all routes, all under 250 NM, and the average price is $192. If I can fill every route, every day, 6 legs/day, that's $1152. So, $250/day/seat to cover fuel, ground handling, etc. $4500/day overall. My half-full planes currently use $5500/day in fuel, $4600 in pax/nav/landing fees, and $11600 in ground handling. They'd all be higher if the planes were full, but I'm currently looking at 18k/day losses.

My leases are ~35k/month each. 2.3k/day overall.

Maintenance (39 x a, 11 x b, 1 x c, x2 planes) is 3.3k/day overall. So now it's 23.6k/day losses.


So, absolute best case for 2 planes with default pricing: 21k/day of revenue. 23.6k/day loss. Even ignoring marketing, I'd need to fill every seat, every day, at more than DOUBLE the default price, just to break even.



If that overhead per seat doesn't drop significantly as I get more planes, it's going to be a short experiment...

Offline Sanabas

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Re: Time for another experiment
« Reply #7 on: December 22, 2012, 01:53:19 PM »
Of course, it would help if I remembered there are return flights too...  :-[

41k/day in revenue if every seat sells, so it's now more like a 4k/day loss. So I'd need to sell every seat at +10% just to break even. It might actually be doable.

Offline Sanabas

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Re: Time for another experiment
« Reply #8 on: December 22, 2012, 04:20:20 PM »
Staff salaries: 88 staff, 289k/month.
Fleet commonality, planes: 61k/month.
Fleet commonality, engines: 117k/month
Insurance: 11k/month

4 planes now:

Staff: 228, 747k/month, 187k/plane, up from 144.5.
Fleet commonality, planes: 109k/month, 27k/plane, down from 30.5
Fleet commonality, engines: 123k/month, 31k/plane, down from 58.5
Insurance: 28k/month, 7k/plane, up from 5.5.

Overall: 986k/month, 247k/plane, up from 239.

brique

  • Former member
Re: Time for another experiment
« Reply #9 on: December 22, 2012, 04:28:07 PM »
There seems to be a major staff level leap when you go from 2 planes to 3 : managers, HR and their ilk appear in silly numbers, and seem to demand bigger offices and more secretaries, or something...

Offline Sanabas

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Re: Time for another experiment
« Reply #10 on: December 22, 2012, 05:18:25 PM »
5 planes:


Staff: 316, 1031 k/month, 206k/plane - Gone up again. 27 pilots, 0 cabin crew, and 279 other staff to help sell a potential 478 tickets per day.
Fleet commonality, planes: 185k/month, 37k/plane -also gone up.  :o
Fleet commonality, engines: 127k/month, 25k/plane
Insurance: 36k/month, 7k/plane,

Overall: 275k/plane

brique

  • Former member
Re: Time for another experiment
« Reply #11 on: December 22, 2012, 05:40:20 PM »
does seem on the high side, the staff level ; how many routes are you running now, that does affect the numbers

Offline Sanabas

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Re: Time for another experiment
« Reply #12 on: December 22, 2012, 05:44:12 PM »
Flying from HQ to 19 different airports.

brique

  • Former member
Re: Time for another experiment
« Reply #13 on: December 22, 2012, 05:52:35 PM »
Is there a minimum staff per destination? Such as ground crew and for customer service : maybe more flights per destination may see the average come down?

For comparison : 10 planes flying 46 pairs to 24 destinations need 509 staff (in my DOTM airline)

Offline Sanabas

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Re: Time for another experiment
« Reply #14 on: December 22, 2012, 05:57:18 PM »
Is there a minimum staff per destination? Such as ground crew and for customer service : maybe more flights per destination may see the average come down?

For comparison : 10 planes flying 46 pairs to 24 destinations need 509 staff (in my DOTM airline)

Could be. I know more destinations makes a little difference, but not sure how much. Let me take a few routes off, so it's still 5 planes scheduled, but less destinations, and see what the personnel tab says...

Offline Sanabas

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Re: Time for another experiment
« Reply #15 on: December 22, 2012, 06:03:51 PM »
5 planes, 19 destinations was 316 staff.

5 planes, 14 destinations is 276 staff. You can see which staff aren't needed in the screenie.

brique

  • Former member
Re: Time for another experiment
« Reply #16 on: December 22, 2012, 06:08:08 PM »
I tried a similar experiment : roughly speaking, same result as you : removing a solo flight had greatest effect on staff level : removing one of multiple flights least effect : interesting to see it so clearly marked.

Offline Sanabas

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Re: Time for another experiment
« Reply #17 on: December 23, 2012, 06:50:18 AM »
8 planes:


Staff: 474, 1548 k/month, 193k/plane
Fleet commonality, planes: 205k/month, 26k/plane
Fleet commonality, engines: 138k/month, 17k/plane
Insurance: 52k/month, 7k/plane,

Overall: 243k/plane

Starting to come down a little bit now, though not fast enough...

I can't decide if engine commonality is bugged, or the way all commonality should work. Might even be both. With just a couple of planes, it is a huge expense. It's a bit of a hidden cost that I think hurts people who start off too conservatively, who get 2 or 3 ATR-sized planes, and wait for them to nudge into overall profit before they try to expand more. Especially if they've screwed up marketing, the result is all their cash bleeds away, and they go nowhere. But if they started with 10 planes, they actually will be into profit more or less straight away. Once you're even past that initial month of growth, engine commonality is trivial.

brique

  • Former member
Re: Time for another experiment
« Reply #18 on: December 23, 2012, 07:33:33 AM »
..... But if they started with 10 planes, they actually will be into profit more or less straight away. Once you're even past that initial month of growth, engine commonality is trivial.

My experience is that you are correct : Looking back at the first year of my DOTM airline : stripping out loan repayments ($4mil start-up loan was repaid within first 6 months, it was never even dipped into but made for a reassuring back-stop) and the initial lease down-payment for 10 new aircraft ; its been in profit every quarter : I'm certain its being able to quickly spread that commonality/back office/staffing growth across 10 aircraft that has been the key.

Talentz

  • Former member
Re: Time for another experiment
« Reply #19 on: December 23, 2012, 07:44:59 AM »
I can't decide if engine commonality is bugged, or the way all commonality should work. Might even be both. With just a couple of planes, it is a huge expense. It's a bit of a hidden cost that I think hurts people who start off too conservatively, who get 2 or 3 ATR-sized planes, and wait for them to nudge into overall profit before they try to expand more. Especially if they've screwed up marketing, the result is all their cash bleeds away, and they go nowhere. But if they started with 10 planes, they actually will be into profit more or less straight away. Once you're even past that initial month of growth, engine commonality is trivial.

Fleet common hasn't changed much since public AWS launch. If you look back through the posts about fleet common, you'll find a central theme to all of them.

"Rapid expand" out of the initial fleet common penalty. Once you go past 10 aircraft of the same fleet type, you'll see the costs start to even out.


Perhaps Sami will change it. However I suspect it's not high on the list right now.


Talentz

 

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