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Author Topic: Time for another experiment  (Read 5889 times)

Offline Sanabas

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Re: Time for another experiment
« Reply #40 on: December 25, 2012, 10:23:31 AM »
In recent years I have downsized the fleet a little and closed a few hopeless routes but I also upgraded the entire fleet to NGs which has noticeably improved profitability. Considering that they don't all have ideal schedules thanks to much of the country being closed from 18-6, they range from $6k to $43k/week. I also have a single aircraft that flies a full schedule of hopelessly unprofitable flights for $-12k/wk.

I want to get in & dissect your airline. Try and work out if you're actually making money with them, see the staff costs, see how much the E120s are subsidising things.  :laugh:

My most recent week was a B-check week. All my planes now have 70+% LFs, and even with the B-check, they all made between 26k and 74k. Overall, the 11 planes' profit for the week was around 475k. But even excluding the loan payments, I lost 200k for the week. In large part because staffing costs are 44k/week/plane. And even though I'll be happy when I break even every week, at that point it still means I'll be bled to death by C-checks. My target is 300k/month/plane, to cover all my expenses. That's 70k/week, roughly. Only one plane has reached that point so far.

RIs are now between 28 & 42. I *think* this one will end up slightly profitable once RIs are all at 100, but it'll be close. I'm certain I could restart and be profitable, if I limited myself to 2-5 planes, and flew no routes longer than 150 NM.

Offline Sanabas

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Re: Time for another experiment
« Reply #41 on: December 25, 2012, 02:36:20 PM »
Not a B-check week, and I only lost 80k. 2 planes made 80k, 2 made 60, and the 7 day scheduled planes made 40 each. All LFs now over 75%.

brique

  • Former member
Re: Time for another experiment
« Reply #42 on: December 25, 2012, 02:44:22 PM »
Just curious, but how do the figures look if you strip out leases & full insurance, as if the birds were owned ?

Offline Sanabas

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Re: Time for another experiment
« Reply #43 on: December 25, 2012, 02:53:22 PM »
I'm not actually paying for the leases yet, not quite past the initial 4 month period. When they all kick in, it'll be about 60k/week. So I really lost 140k, and my two best planes only made 75k.

Insurance is 17k/week, I think I'd only save 8-9k if they were all owned.

brique

  • Former member
Re: Time for another experiment
« Reply #44 on: December 25, 2012, 03:14:12 PM »
Its very tight, isnt it? Not much more you can do except try to survive until routes have built to maximum revenues, and even then, its still going to be a lot of juggling to get past maintenances without too much trauma.

Offline Sanabas

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Re: Time for another experiment
« Reply #45 on: December 25, 2012, 07:27:58 PM »
Overall LF above 80, weekly loss down to under 50k. Got around to scheduling plane #12. 8 daily routes, all to one of the 27 airports I already fly to. 3 routes went from 1 to 2 daily, 5 routes went from 3 to 4. Screenie shows the extra staff required. 6 pilots to fly the one plane all day, every day. 20 people to park it. 20 people to deal with the 144 potential customers.

Schedule is also attached.

Offline Sanabas

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Re: Time for another experiment
« Reply #46 on: December 25, 2012, 07:56:52 PM »
So, that's it. Now sitting back, waiting for 100 RIs across the board, and seeing who makes money, who can have prices cranked up, etc.

I have 20 routes that are 50 or 60 daily pax. Each one has 4 daily flights, one of them at night.
One route of 40 daily, with 3 flights, one at night. Would add a 4th, but no room.
3 routes of 30 daily, 2 flights each. The slightly busier one has a night flight, the other 2 are both day only.
3 routes of 20 daily pax, they have a single flight each.

So once RI hits 100, I *should* get near 100% LFs across the board, with the possible exception of some of the night flights. CI will only be 11 or so, but that shouldn't matter.

The per plane expenses:

Staff: 987 staff, 2280k/month, 190k/plane. 12th plane actually increased the cost slightly, adding 93 staff, when the first 11 only needed 81/plane on average.

Plane commonality: 235k/month, 20k/plane.

Engine commonality: 152k/month, 13k/plane.

Insurance: 74k/month, 6k/plane.

Leasing cost (1 plane owned, other 11 significantly cheaper than plane value): 322k/month, 27k/plane

Yearly maintenance (C + 11 x B + 40 x A): 551k/month, 46k/plane

Marketing (smallest available general campaign): 220k/month, 18k/plane

Overall: 320k/plane/month.

Staff makes up 59% of the overhead.
Maintenance, including commonality, 25%
Leasing and insurance, 10%
Marketing 6%

Breakeven point is 450/hour, near enough. Routes over that amount are contributing to making us profitable. Routes below that are holding us back.

If the planes were all owned, it'd be $407/hour.

If the planes were all owned, and brand new, $395/hour

Offline Sanabas

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Re: Time for another experiment
« Reply #47 on: December 25, 2012, 08:17:23 PM »
For marketing, my campaign is newspapers, nearby city, and it costs me a tick over 50k/week. I actually found the website for Vanuatu's only daily newspaper. The triple sized box costs 10 grand a week. But that's 10,000 vanuatan vatu, about $110 US.  :laugh:

brique

  • Former member
Re: Time for another experiment
« Reply #48 on: December 25, 2012, 09:33:54 PM »
Well, yes, the actual advert costs $110... but there are all those extra costs... like... um... agents fees, commissioning artists, photographers, and models, they dont get out of bed for less than $10k, and copywriters, focus groups, market research and... lunches at the advertising agency... and... stuff... its not cheap, you know!

Offline Sanabas

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Re: Time for another experiment
« Reply #49 on: December 26, 2012, 01:12:45 AM »
B-check week for most planes, and I only lost 100k. Suspect this coming week may actually show a profit.  :o


Offline Sanabas

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Re: Time for another experiment
« Reply #50 on: December 26, 2012, 05:18:14 PM »
Normal weeks are now profitable.

B-check weeks are not.

Still not enough profit to overcome C-checks, RI now 45-60, company wide LF now over 86%. Most of the missing pax are on night flights. Will check how much I save in staff by removing the nightflights once I have final numbers. In a huge airline, it's trivial. In this airline, it may not be.

Offline Sanabas

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Re: Time for another experiment
« Reply #51 on: December 27, 2012, 10:04:46 AM »
Leases have now fully kicked in. Still profitable.  I even had some tax deducted.  :o

RIs are 70-84, overall LF 89%.

Offline Troxartas86

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Re: Time for another experiment
« Reply #52 on: December 28, 2012, 08:50:46 AM »
You are a legend now.  :)

Offline Sanabas

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Re: Time for another experiment
« Reply #53 on: December 28, 2012, 03:09:55 PM »
Nah. Still not a sustainable airline. B-checks are wiping out the monthly profit, more or less, now that leases have fully kicked in. So I'll steadily be bled to death by C-checks.

RIs are now up to 95+ across the board. So, later today, they'll be at 100, and I'll look at the routes. I already know there will be some that don't earn enough.

So, I will restructure the airline at that point. Redo the entire schedule, terminate as many leases as needed, and sack a bunch of staff. At that point, I'll have an airline that is sustainable long term. If the morale/CI hit kills me, I'll restart. It'll just mean it takes another RL week to prove sustainability.

Offline Sanabas

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Re: Time for another experiment
« Reply #54 on: December 29, 2012, 02:52:39 AM »
All RIs are 100. LF is 93%. First non B-check week of December is underway, so in about 3-4 hours I'll look at every route. I've got another tax deduction coming up, for the 4 weeks of November I lost just 1,637. Which included 122k of loan payments, 70k of that was principal. So 19,863 about to get deducted.  ;D

At a glance, I'm really, really close to breaking even overall. I'll be conservative, say 100k/month profit. That includes all expenses except heavy maintenance.

1 C-check = 60 A-checks.
1 B-check = 2.6 A-checks.

So yearly maintenance = 128.6 A-checks.
C checks = 60/128.6 = 47% of maintenance costs.

My budget before said total maintenance was 551k/month. 47% of that is 257k.

So I need an extra 160k/month of revenue to be sustainable. Total revenue is 7.4 mill for a 4 week month, if I put ticket prices up 5%, and loads don't drop, that more than covers it.

I'd actually be sustainable right now if it wasn't for lease costs.

Offline Sanabas

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Re: Time for another experiment
« Reply #55 on: December 29, 2012, 08:33:56 AM »
Almost 86k profit for the week, excluding loan payments. Ground handling of around $440 per flight is the biggest single expense. That's as good as it's going to get without raising prices. Now on to the routes themselves...

Offline Sanabas

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Re: Time for another experiment
« Reply #56 on: December 29, 2012, 09:37:41 AM »
All profits are for full flights. Some night stuff is a little emptier, random variation seems to give me the occasional empty seat, too. Remember, aiming for about $450-$500/hour as the minimum to break even...

In order of distance:

Valesdir, 55 NM, 20 daily pax, 18 supplied, 2:20 round trip: consistent 100% loads, $1800 profit, $771/hour

Lamen Bay, 68 NM, 50 pax, 36 supplied, $720/hour

Dillon's Bay, 75 NM, 50 pax, 36 supplied, $700/hour

Paama, 76 NM, 50 pax, 36 supplied, $700/hour

Malekoula Island, 80 NM, 30 pax, 18 supplied, $700/hour

Ulei, 82 NM, 30 pax, 18 supplied, $420/hour on middle of night leg, $700/hour on day leg.

SW Bay, 88 NM, 50 pax, 36 supplied, $656/hour

Craig Cove, 89 NM, 60 pax, 36 supplied, $656/hour

Ipota, 90 NM, 50 pax, 36 supplied, $656/hour

Lonorore, 110 NM, 50 pax, 36 supplied, $600/hour

Norsup, 111 NM, 60 pax, 36 supplied, $600/hour

White Grass, 117 NM, 50 pax, 36 supplied, $583/hour

Batu Berendam, 118 NM, 50 pax, 36 supplied, $583/hour

Sara, 134 NM, 50 pax, 36 supplied, $567/hour

Redcliffe, 137 NM, 20 pax, 9 supplied, $551/hour

Walaha 142 NM, 50 pax, 36 supplied, $535/hour

Longana, 145 NM, 60 pax, 36 supplied, $537/hour

Santo-Pekoa, 146 NM, 50 pax, 36 supplied, $508/hour - All the routes to this point fly 100% full, almost all the time. Some drop to 7 or so pax at night. The last couple occasionally have a single empty seat during the day, though none of them have too small warnings. The decreasing income/hour is down almost entirely to slightly increased round trip times. The raw profit actually decreases as the flights get longer. The shortest route has ~1800, the 140 NM routes have ~1700.

Futuna, 154 NM, 50 pax, 27 supplied, $492/hour - consistently has a couple of empty seats/week for each route.

Maewo-Noane, 163 NM, 20 pax, 9 supplied, $480/hour - consistently full

Anatom, 174 NM, 50 pax, 36 supplied, $468/hour

Olpoi, 197 NM, 50 pax, 36 supplied, $436/hour - too small warnings from this point. Most of these are still full.

Gaua, 213 NM, 50 pax, 27 supplied, $413/hour

Vanua Lava Island, 235 NM, 50 pax, 36 supplied, $375/hour - still full, apart from the 2am departure.

Mota Lava, 245 NM, 50 pax, 36 supplied, $375/hour - full flights make 375/hour. 4:10am departure is consistently at 6 pax, whereas shorter routes are consistently full departing at 04xx.

Torres, 280 NM, 20 pax, 9 supplied, $328/hour - all full.

Noumea, 285 NM, 50 pax, 36 pax - My only international flight. This one is seriously hurting my airline. Night flight actually loses money. Day flights can't seem to better than 6 seats sold. So on my best days, I'm only selling 20 seats on a 50+ pax route. Maybe I crossed some sort of threshhold, whether because it's international, because it's my longest flight, because Noumea's the biggest airport I fly to, or all 3. But seems the too small warning is serious for this flight. 5 seats sold each way is barely above breakeven. 6 seats sold each way is about $80/hour. Full plane would be about $320.


So, everything over 175 NM simply isn't worth flying. 140-175 NM is marginal.

I'm now going to self-destruct by clearing all the schedules, remaking them flying only the shortest stuff on 3-4 planes, and firing the staff. If the CI/morale hit doesn't cripple me, I should be sustainable at default pricing.

Offline Sanabas

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Re: Time for another experiment
« Reply #57 on: December 29, 2012, 10:17:37 AM »
I missed the addition of a very, very welcome feature. The ability to close routes in bulk and keep the slots, rather than doing it individually. Awesome.


Things that are somewhat annoying: there is a requirement of 1 staff each for 5 of the categories, even without planes. Set staff to what was needed, and everyone other group went to empty, and therefore zero morale. But I had 5 staff left, all at -100 morale. So I fired them too. Might make the CI hit bigger. But at least I can hire happier people.

Things that are even more annoying: The new people I hired are just as grumpy. CI is down to -9 as well.

49 staff for plane #1, 9 destinations, and the average morale is -90.
116 staff for 2 planes, 12 destinations, now it's -81. 67 staff for that plane, with 3 destiantions added.
- day changed at this point. 34 flights, 12 of them cancelled. The remaining 22 had an average delay of 1 hour, 17 minutes, a total delay of 43 hours. In one 24 hour period, with just 2 planes. That's sort of impressive. :D
196 staff for 3 planes, 12 destinations, -70. 80 staff for that plane, despite not adding a single destination.
312 staff for 4 planes, 12 destinations, -61. 116 staff that time, again without adding a destination.

That's where I'm leaving it. Will let it run overnight, see what happens.If the morale issue doesn't improve, I'll restart, same deal. 4 planes only, 12 destinations only, nothing over 120 NM. Then I have to sit back & wait a RL week again, while RI climbs up to 100.

Offline Sanabas

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Re: Time for another experiment
« Reply #58 on: December 29, 2012, 10:39:11 AM »
Also, found something interesting.

The dashboard says my load factor is 99.4%. 197 of the 198 seats which actually flew were sold. 197/198 = 99.495%

But the stats page says my load factor is 61.4%. 197 seats sold, 306 seats that should have been flown, if not for the cranky staff. 197/306 = 64.4%. hmmm. From looking at my DOTM airline, I actually think airline wide LF is not determined by seats sold/seats for sale, but actually by RPK/ASK. Looks the same here, as it's a couple of the longer flights that were cancelled.

Strange that the cancelled flights are counted for LF purposes, though that may just be caused by the cancelled routes showing 0%, and will disappear once they actually get flown at least once.

Will see what happens with it tomorrow, too, before putting in more maths geekery bug reports.  :laugh:

Offline Sanabas

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Re: Time for another experiment
« Reply #59 on: December 29, 2012, 10:41:19 AM »
Day 2, 54 flights, 22 cancellations. CI has dropped from -9 to -11. I reckon I'm restarting tomorrow.

 

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