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Author Topic: Growth....  (Read 854 times)

ReedME

  • Former member
Growth....
« on: March 06, 2013, 07:20:52 AM »
Hey all,

Quick question I'd like to pose to you all, because I can't seem to find the answer, I'm based in Vienna (LOWW) and have the second largest market share for vienna at the moment however I'm experiencing that two of the other airlines there Pit World and Summit Airways appear to always have more cash on hand and are growing faster, I'm making on average 800k a week profit but find I'm spending it all on new planes when possible then almost double on scheduling for those planes. I'm struggling to see how these guys are accelerating away from me so fast, where are they getting the cash to expand like this? Am I doing something wrong?

Talentz

  • Former member
Re: Growth....
« Reply #1 on: March 06, 2013, 07:45:14 AM »
Hey all,

Quick question I'd like to pose to you all, because I can't seem to find the answer, I'm based in Vienna (LOWW) and have the second largest market share for vienna at the moment however I'm experiencing that two of the other airlines there Pit World and Summit Airways appear to always have more cash on hand and are growing faster, I'm making on average 800k a week profit but find I'm spending it all on new planes when possible then almost double on scheduling for those planes. I'm struggling to see how these guys are accelerating away from me so fast, where are they getting the cash to expand like this? Am I doing something wrong?
As I look into my crystal ball... what do I see.. what do I see...


Oh. I see LH widebody aircraft flying SH 300nm routes... don't think Boeing had SH in mind when they rolled out the 762ER... at least as far as efficiency goes.

Why dont you fly LH with a LH aircraft? Makes no sense. The 752 isn't much better in that regard...

Price of 762ER is roughly 85M... Price of MD80 is 30m?

Least Pit World has that YYZ route to print.


Talentz


ReedME

  • Former member
Re: Growth....
« Reply #2 on: March 06, 2013, 08:23:02 AM »
I can think of plenty of examples as to where 767's fly short haul routes in reality. But you're right I should be pushing them on Long Haul?

Talentz

  • Former member
Re: Growth....
« Reply #3 on: March 06, 2013, 09:11:17 AM »
Yes. You should...

Or actually the correct term would be should've. Its probably too late with your current aircraft now. Leases should have kicked in or be ready to anyway. Pulling the aircraft now and putting it on a LH route would be akin to committing suicide at this point in time.

For now, work up your cash and get a hold of another aircraft. Either 752 or 762 and then put it on a LH route. Ideally a 3500-3900nm route, 7 days a week. Look to east. The middle has some nice routes to jump on...

GL

Talentz

Offline Infinity

  • Members
  • Posts: 1564
    • Aviation Awareness
Re: Growth....
« Reply #4 on: March 06, 2013, 11:07:32 AM »
I can think of plenty of examples as to where 767's fly short haul routes in reality.

That's not of the matter, the matter is what's best in this game. A 767 has much higher cost per seat (from acquisition to pretty much everything else) than a narrowbody short haul aircraft like the A320 and needs the higher revenue from long haul routes to make up for that.
Flying a widebody as your first aircraft on short haul is among the worst mistakes you can make in this game.

ReedME

  • Former member
Re: Growth....
« Reply #5 on: March 06, 2013, 11:42:51 AM »
I don't suppose canning a couple of those shorthauls which were operating on almost a loss for a longhaul route would be worthwhile at this point in the game would it?

My initial thought was to have just the one 762 flying to heathrow with an aim of shifting that to something with more seats but a shorter range, hard to find at this point in the game. Slots are limited into heathrow but the demand is massive. I just feel that despite having 100% load factors on both my heathrow and dublin routes, and having the prices on those routes at about 150% of the default that I wasn't making enough money, maybe it was the short sub 400nm routes that were killing me.

Looking further into it I find that whilst the Dublin and Heathrow routes were both profiting 70k per week, my frankfurt, munich and amsterdam routes were getting loadfactors of about 25%
« Last Edit: March 06, 2013, 11:45:27 AM by ReedME »

exchlbg

  • Former member
Re: Growth....
« Reply #6 on: March 06, 2013, 12:00:13 PM »
I think  especially with Heathrow WB aircraft can be the right answer, if itīs already out of slots. But I would mix this service with another more appropiate for a LH aircraft, can be done in a multiple-day schedule.But make sure you monopolize that connection, otherwise youīll loose.
When did you start serving those 25%-routes ? If you just started, those numbers are normal, they will gain with rising CI/RI.Try to work with fares in the meantime.

ReedME

  • Former member
Re: Growth....
« Reply #7 on: March 06, 2013, 12:32:58 PM »
Those 25% routes have been operating for well over 4 months now, all have Route image over 50% I tried bringing the fares down but all that did was increase the load factors without changing the profit margin. I'm tempted to shut them down, focus on Heathrow and Dublin with the 757's then use the 762's for their real purpose...

exchlbg

  • Former member
Re: Growth....
« Reply #8 on: March 06, 2013, 03:50:19 PM »
Since I canīt look into your world, I can only advise to do some simple math before starting heavily competed routes: divide all demand through number of flights, there you can see the average possible number of passengers you might welcome on board, maybe positively influenced by fare,RI/CI and flight times. Very often I wonder why small startups add flights to routes that obviously generate losses for all other players already, leaving routes with monopoly underserved.If you have low RI/CI, you will get a lot less passengers than the average number, I think this is the reason why you still fly with empty planes on those routes.

ReedME

  • Former member
Re: Growth....
« Reply #9 on: March 06, 2013, 04:16:15 PM »
Fair enough - I canned the extra-short haul 767 flights, 2 hour turnaround time doesn't work if the flight time is only just under an hour. I own 75% of the Dublin and Heathrow route market share, and intend to make those my only shorthaul international routes, focusing instead on Long-Haul Itl.

I just cannot compete with the frequency of the MD80 on those short hauls, unless I were to get some 737's but with my cash flow as it is, that isn't ideal right now. Should be an interesting couple of weeks. I know you said it would be suicide Talentz but I guess we will see...

ReedME

  • Former member
Re: Growth....
« Reply #10 on: March 09, 2013, 01:54:25 AM »
Can I just say the 767 on a 600nm route to Heathrow is making me a profit of 1.4 million a week. If only I could get another 200 seats onto both planes. Tempted by the 747 SR - thoughts?

Offline alexgv1

  • Members
  • Posts: 2184
Re: Growth....
« Reply #11 on: March 09, 2013, 10:15:58 AM »
Any 747 ('cept maybe the -8) is gonna be a fail in Modern Times when the fuel gets too high so I'd stay away from them. Plus how many routes are there going to justify this extra fleet? They're the questions you must ask yourself. Pretty much anything is going to make money into heathrow especially with the slots stopping over supply, you can pretty much charge what you want.
CEO of South Where Airlines (SWA|WH)

 

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