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Author Topic: Help! No profit!  (Read 1603 times)

Offline MartinaTorres

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Help! No profit!
« on: January 16, 2014, 02:04:38 AM »
I am running a 200+ Aircraft airline and i am not getting any profit just losses, can anyone help meż?

Offline Cardinal

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Re: Help! No profit!
« Reply #1 on: January 16, 2014, 02:58:03 AM »
Can you be more specific?

You don't get to 200+ planes without profit, so what changed? Fuel spike? Competition? Employee strike? Maintenance crisis? You need to look for trends in your expenses to see what's gone up, or look at your historical pax numbers to see if anyone's still flying your airline.

Offline MartinaTorres

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Re: Help! No profit!
« Reply #2 on: January 16, 2014, 01:25:58 PM »
Load factors are good (Above 80% in a a three cabin configuration), Only 4 routes are losing money since they are brand new and have lost approximately 70 Million dollars in a 12 hour time (Real life)

I have also transported 5 241 152 passengers this year and it it march, the fuel price is at about 732 USD and most of my long haul routes are suffering.. In this rate i should go bankrupt in a time of 24 hours (I have limited cash) and my airlines i worth 992 580 742 USD

I have lost 107 559 547 USD in a three month period

exchlbg

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Re: Help! No profit!
« Reply #3 on: January 16, 2014, 04:19:09 PM »
For anybody outside your world even these data say nothing. What aircrafts are you using? How about fleet commonality? Income sheet tells you, where your money gets burned exactly.
I suppose you expanded too rapidly, didn´t keep an eye on your liquid funds and are using thirsty aircrafts on thin , long routes. Sounds pretty hopeless.

Offline LemonButt

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Re: Help! No profit!
« Reply #4 on: January 16, 2014, 05:11:30 PM »
If you have 80% LF and are losing money, then you have made some serious mistakes somewhere.  The best thing would be to post a screenshot of your income statement if you want other players to try and help you or you can request mentoring.

Offline MartinaTorres

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Re: Help! No profit!
« Reply #5 on: January 16, 2014, 06:18:11 PM »
Here it is- I have been on the game since 2002, not a new airlines



Offline Sami

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Re: Help! No profit!
« Reply #6 on: January 16, 2014, 06:23:36 PM »
Check your ticket prices, lots of routes with nearly 100% LF and low prices probably....

Also the leases seem to be rather expensive.

Offline LemonButt

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Re: Help! No profit!
« Reply #7 on: January 16, 2014, 06:35:03 PM »
Yes--if you haven't reset prices ever then you are leaving tons of money on the table.

Your leases and fuel are gobbling up $100 million of your $156 million in revenue, which is crazy high.  By comparison, my airline in DOTM is paying $25 million for leases and $13 million for fuel on $140 million in revenue.  Fuel is 1/3 the price in DOTM currently, but if you are paying $60 million for leases then your revenue should be significantly higher than it is.  I'm turning an almost 10% profit with 62% LF also and you said you had 80%+ LF, so it would appear your issues are either with ticket prices being too low or leases being too high.

Can you post income statement for the weeks you were actually turning a profit?  I'm guessing you were turning a "false profit" where you had leases covered by the 4 month prepayment, which showed a profit until the monthly lease payments started coming due. 

Offline MartinaTorres

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Re: Help! No profit!
« Reply #8 on: January 16, 2014, 07:02:32 PM »



I also increased prices 15% in all classes, should i do more? less?

Offline LemonButt

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Re: Help! No profit!
« Reply #9 on: January 16, 2014, 07:09:23 PM »
You should just have to click the reset all prices checkbox at the bottom to set prices to suggested levels.  Since prices don't change automatically, the only way to account for inflation is by resetting prices every so often.  During high inflation periods such as the 80s, this can make/break you.

There appears to be a $13 million delta on the leases, which would mean that you were profitably when you had prepaid leases, but when the leases kicked in you started losing money.  When you expand quickly, you will lose money for a short period until route image increases to 100.  Check your route image page and I'd bet you have several pages of routes under 100.  If pricing doesn't fix it, then you may just need to ride it out until RI reaches 100 on your new routes.

Edit: You can see the +$8 million expense from Week 10 to Week 11 on the leases. which started pushing you over the edge.  Week 12 had extra maintenance which is where the extra loss came from.
« Last Edit: January 16, 2014, 07:11:49 PM by LemonButt »

Offline Gevans

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Re: Help! No profit!
« Reply #10 on: March 28, 2014, 01:45:46 AM »
I just started in beginner world #2 and wanted to try a heavy haul long distance airline.

London Heathrow is the #1 airport for that but I wanted to try an airport that was almost as good but not as competitive.
So I chose Tokyo Narita.
For my main route I chose to fly to LAX.

Leased A300-330's,  set up my times so that all landings happened in prime time and even started a radio campaign just for that route.
And maximized my aircraft time to make efficient use of my 330's.
And kept my airline's image in the top 3 or 4.
Thought this would be very profitable.

Was that ever a mistake.
It was a constant struggle to fill seats even though I was only meeting part of the demand.
I tried lowering prices....started at -15% .....then -20%.......then -25%, -30%  and more.
Eventually after many months I started to see nearly full planes on some of the flights.......but the profits were not really good.

And then I see the #3 airline in Chicago.......flying the exact same aircraft
He appears to be using the same strategy......but flying to Heathrow from Chicago ..........but, according to the specs Narita should be a better long haul airport than Chicago.
And Heathrow shows to have only about 20% more demand than LAX flying from Narita.

But......this airline in Chicago has no problem filling seats and is by far the most profitable airline in the game, and doing this with less aircraft ( 3 - 330's )
AND ......is 10 times more profitable flying long haul out of Chicago than me flying out of Narita !!
Also....he's competing against many airlines and is #3 in Chicago and I have no competition at all.........zero !

I'm trying to figure out what went wrong and it makes no sense.........I thought I'd done everything right.
It's like this route from Chicago to Heathrow was set up to be unusually profitable over all others and there's no way to know this unless your the lucky airline in the right place.
I want to learn from things I do wrong but near as I can tell.........this is all about dumb luck.
« Last Edit: March 28, 2014, 02:04:53 AM by Gevans »

Offline Sanabas

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Re: Help! No profit!
« Reply #11 on: March 28, 2014, 04:33:42 AM »
It's not dumb luck. You might be getting less pax because your departure times are bad, or too close together. You might be getting less profit because you're spending too much on things like marketing. You might be getting less revenue because your schedule is really inefficient, with your planes spending a lot of time sitting around doing nothing. Should be quite easy to make a huge airline if you have NRT to yourself, so odds are you're not doing everything right.

Sticking a mentor request in might help you get a more detailed review of what you're doing.

Offline CUR$E - God of AirwaySim

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Re: Help! No profit!
« Reply #12 on: March 28, 2014, 08:51:28 AM »
The unrealistic high (premium) demand out of and to Heathrow allows you to set prices absolutely insane high as long as the route is not 180-200% crowded.

I guess you use standard prices on your KLAX-RJAA route, Gevans.

Offline Gevans

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Re: Help! No profit!
« Reply #13 on: March 28, 2014, 02:28:55 PM »
Using a mentor is something I thought about.

Curse's suggestion that Heathrow has an unrealistically high demand so that those flying in and out of there can set insanely high prices is the only thing that makes sense.
Why Sami sets it up that way I don't know.........it's not very fair to airlines using other big airports around the world.

Before now I guess I didn't realize how much of an early advantage it is to fly to and from Heathrow.

I regards to Sanabas.
My advertising budget is about 3% of my total operating revenue's........I've gotten much better getting the maximum bang for the buck with advertising.
My fleet utilization is at 15.6 hrs........this other airline is at 14.8
My punctuality is in the high 90's unless the weather is bad. 
My revenue passenger km is # 4 at 192............this other airline is #2 at 229.


Offline LemonButt

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Re: Help! No profit!
« Reply #14 on: March 28, 2014, 02:43:46 PM »
Can you post your fleet mix?  Commonality costs could be eating your profits.

Offline Gevans

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Re: Help! No profit!
« Reply #15 on: March 28, 2014, 06:39:28 PM »
Can you post your fleet mix?  Commonality costs could be eating your profits.

Here it is.

A330-300

Reg #    Owner   Value / Lease   Lease expires   Avg LF %   Routes   Daily profit   Prev. week profit
   
(#032)    Leased    948 370 USD / month    10-Jan-10   87.5 %    3   39 021 USD   664 597 USD
   

(#036)    Leased    1 197 470 USD / month    02-May-09   
Aircraft will be delivered on: 16-Nov-02

(#040)    Leased    1 230 150 USD / month    02-Dec-09   85.9 %    3   32 760 USD   365 653 USD
   

(#102)    Leased    1 306 100 USD / month    02-Dec-09   96.6 %    2   200 861 USD   828 251 USD
   

(#321)    Leased    1 187 250 USD / month    02-Oct-05   71.2 %    1   65 561 USD   370 768 USD



737-400   

Reg #    Owner   Value / Lease   Lease expires   Avg LF %   Routes   Daily profit   Prev. week profit   

(#19127)    Leased    165 560 USD / month    18-Jan-10   72.8 %    3   42 308 USD   278 771 USD   

(#19412)    Leased    215 630 USD / month    18-Feb-06   76.1 %    2   22 152 USD   197 648 USD
   

(#19815)    Leased    225 310 USD / month    04-Sep-08   74.7 %    2   51 980 USD   324 548 USD
   

(#19941)    Leased    226 510 USD / month    19-Jul-09   61.2 %    3   44 764 USD   210 274 USD
« Last Edit: March 28, 2014, 06:45:16 PM by Gevans »

Offline LemonButt

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Re: Help! No profit!
« Reply #16 on: March 28, 2014, 06:52:59 PM »
You aren't making any profit because your RI likely hasn't matured to reach 100 yet.  You have just started out and you will be losing money (on paper since leases are prepaid) for the first several months when opening new routes.  Check out the Route Image page to see where you're at currently.  You cannot compare your airline to an established one apples to apples because their RI are at 100 and yours are at 0 starting out.

Beginners World has insanely easy settings, which means you can fly gas guzzlers profitably without much effort.  If you are flying a route with zero competition and default pricing the only possible reason you would be losing money is your RI is <100.

It is also important to note that you prepaid your leases for 4 months when getting an aircraft, so those prepayments are allocated to the months in which they paid for.  These are non-cash transactions while the income statement might say you lost $1 million, your cash could have actually increased (not decreased).  Look at your cashflow statement to see cashflows and if you are truly "losing" money.

Offline Gevans

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Re: Help! No profit!
« Reply #17 on: March 28, 2014, 07:23:58 PM »
That all makes sense Lemonbutt but this other airline that made huge profits right away started almost the same day I did and leased the same aircraft........actually he has 3 different aircraft types costing more maintenance than my 2.
My RI going to LAX is now over 65 and my profits are getting a lot better but I bet his RI to Heathrow is no better and probably worse than mine...........after all I did put a radio campaign on my route.

If I raised my prices to default my loading would drop like a stone, I tried that before and your profits don't go up enough to make it worth taking the hit to your loads. I don't want to raise my ticket prices till the demand gets stronger.

Anyways, I think Curse nailed the reason why and I think it's unfair to give airlines flying in and out of Heathrow that much of an advantage over all the other airports in the world.

lol........I mean 10 times the profit, how can you compete with that.
This #3 airline (probably not anymore) in Chicago is already paying cash to buy brand new 757's while I'm still struggling to afford leasing my next used aircraft.
........just because he put everything on that route to Heathrow which is what I did to LAX at the same time.
« Last Edit: March 28, 2014, 07:31:56 PM by Gevans »

Offline Sami

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Re: Help! No profit!
« Reply #18 on: March 28, 2014, 08:01:52 PM »
Heathrow has an unrealistically high demand so that those flying in and out of there can set insanely high prices is the only thing that makes sense.
Why Sami sets it up that way I don't know.........

Don't believe in everything what the guys who "know everything" say.

LHR demand and pax allocation is calculated in the EXACT same way as ALL other airports.  (and I find it ridiculous even to suggest that LHR would have some special "boosts" or something in that way!)

(But still, in reality, London IS the biggest European finance/business centre and it has a very high business passenger base - the city airport for example wouldn't live without them).
« Last Edit: March 28, 2014, 08:05:46 PM by sami »

Offline LemonButt

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Re: Help! No profit!
« Reply #19 on: March 28, 2014, 08:06:20 PM »
The other element is business/first class pax, which is why LHR is so profitable.  IMO the demand to LHR is fine and the only issue is that there isn't enough slots to allow airlines to effectively compete, so you end up with a bunch of airlines with no competition (or at least the threat of competition) and they just rake in the cash.

You should expect pathetic LF when RI is just getting established--the ~20-30% you experienced is normal.  Also slots are paid for with post-tax dollars, so even if you see they are making a bunch of money, slots at LHR cost way more than your slots at ORD (typically) so their expansion costs are much higher--you just can't see them.

 

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