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Author Topic: [-] New Aircraft Resell Limitation  (Read 897 times)

Online Jetsetter

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[-] New Aircraft Resell Limitation
« on: January 28, 2014, 07:58:07 PM »
Problem 1: So, the 787 line is booked out to infinity. Invariably, a portion of those orders will be posted to the used aircraft market and sold with ridiculous markup. Now this wouldn't be a problem on an aircraft that has minimal demand and production slots can easily be acquired, but on the big selling aircraft this deprives other airlines of production slots.

Problem 2: Alliances unfairly get a jump on aircraft now. As a solitary airline who thinks alliances are dumb, I'm limited to receiving 1 787 a month. However, airlines in alliances have other members buy aircraft and take up production slots, meaning they can take on 2 or 3 or 4 787's in the same period. In the real world, new aircraft are delivered with limitations on resell. Ryanair was a notable example of this, as Boeing did not want them unloading new build 737-800's onto the used market, undervaluing the price of a new one bought directly from Boeing.

So, the premise is to add a limitation on a newly purchased aircraft in how quickly they can be resold. Perhaps an airline has to wait a year, maybe two years. This would be reflective of reality, and balance the playing field from the favor of the aged and anti-competitive alliances to all players. Furthermore, this would result in more equitable production slot allocation.
« Last Edit: January 29, 2014, 08:57:15 AM by sami »

Online Sami

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Re: New Aircraft Resell Limitation
« Reply #1 on: January 28, 2014, 08:01:03 PM »
I'm really not in favour of this as part of the players do like to run the leasing / selling business too, and this would make it impossible.

Offline meiru

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Re: New Aircraft Resell Limitation
« Reply #2 on: January 28, 2014, 08:05:31 PM »
I also don't thik you should change something here... there are other types you can buy and in real life it's the same problem.
An other question would be, if the airlines have too much money to buy the new aircrafts... is it too easy to make huge amounts of money and is this maybe destroying the markets a little bit... but beside this, I'd not change something.

Offline dmoose42

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Re: New Aircraft Resell Limitation
« Reply #3 on: January 28, 2014, 08:09:53 PM »
I agree with the issue below; however, the current commonality system forces airlines of any meaningful size to get help from alliance members in order to avoid going over the dreaded three fleet limit.  If there were reforms to the commonality system, then modifications on immediately selling aircraft to others could help allow the production lines to be more equitable...

However, I do note that if I am buying them for a fellow alliance member, having to wait 1 year or 2 years to sell on the plane, may not be a sufficient limit as the carrying costs are realtively small.  However, further restrictions would limit the market driven nature of the game.  What I suggest is that the airlines offer a bigger discount to airlines that agree to fly the plane for a minimum of 10 years (can't resell).  Right now if you buy 40 planes, you get a 20% discount.  Maybe you should only get this discount if you agree to fly the planes for a minimum length of time.  Or maybe your orders get prioritized if you fly the fleet type in question., but that's not terribly realistic...

Now that I think about this proposal, maybe the answer is just to make the price of new planes more dynamic - if the cost of the 787 rises further, it will be less economical and people will fly other, cheaper planes.  

Online Jetsetter

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Re: New Aircraft Resell Limitation
« Reply #4 on: January 28, 2014, 08:47:35 PM »
I'm really not in favour of this as part of the players do like to run the leasing / selling business too, and this would make it impossible.

Perhaps an alliance restraint then? Transactions conducted outside of the guise of an alliance would be truer to the ebb and flow of the market, rather than being contrived for the already sizeable personal gain of alliance members. Right now I'm receiving 787's for the next 10 years, and I'm going to have to carry the costs of two fleets over that time period, whereas alliance members can collude to have that fleet swapped out in two years via alliance member market transactions. Compounded by the consideration that the only airlines capable of capitalizing outright new aircraft purchases are in the top three or so alliances, the rest of the field of airlines get the fleet commonality penalty carried out to two or three or more times the effect against their bottom line.

Offline LemonButt

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Re: New Aircraft Resell Limitation
« Reply #5 on: January 28, 2014, 09:02:24 PM »
A few simple reforms would solve many problems:

1. Large order discounts are currently only based on the number of aircraft purchased.  Add another factor of prepayment.  If you want to put down 100% prepayment for 50 aircraft you get the 20% discount and then scale down from there.  With the new accrual accounting, there is zero incentive to prepay 100% whereas before you'd get the writeoff so it would be foolish for any airline to put up 100% under the current system without some sort of incentive (time value of money).

2. Collusion between alliance mates is going to happen, so instead of making it impossible and having them figure out ways to work around it, why not just discourage it by making it expensive.  There could be a "luxury tax" of 50% on any/all transactions of aircraft (lease or buy) between alliance mates that are under 1 year old, 35% under 2 years, and 15% under 3 years.  The reason alliance mates collude is because it creates value for the airline receiving the aircraft.  Value can still be created, but it will just be much less as the costs of doing so will be significant and reduce any profits to be had from the exchange scheme.  Many airlines would still do this because they have the cash and are more than willing to pay a huge premium to get aircraft quickly and would rather enrich alliance mates than some other random player.  All transactions are logged in the database, so if a player leaves an alliance, buys aircraft, and tries to rejoin then they'd have to pay the luxury tax before joining to make up for the "tax dodging" on previous transactions.  IRL government is responsible for regulating businesses to ensure collusion, price fixing, etc. isn't happening.  American/US Airways merged and regulators said they had to divest slots as part of the deal (an expense) to ensure things remain competitive--a luxury tax would be in the same spirit.

Offline Infinity

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Re: New Aircraft Resell Limitation
« Reply #6 on: January 28, 2014, 09:09:39 PM »
As a solitary airline who thinks alliances are dumb

Well that's your problem then. A political party might think a coalition government sucks, but is that a reason to complain about other parties reaping the rewards of teaming up? You can get more than one 787 per month as well, you just have acknowledge the social component of this game.

This is all about choices. You chose the path without team inflicted restrictions. You surrendered the advantages team play gives when you decided that the disadvantages outweigh them for you. You can't have it both ways.

Online Jetsetter

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Re: New Aircraft Resell Limitation
« Reply #7 on: January 28, 2014, 10:00:42 PM »
1. Large order discounts are currently only based on the number of aircraft purchased.  Add another factor of prepayment.  If you want to put down 100% prepayment for 50 aircraft you get the 20% discount and then scale down from there.  With the new accrual accounting, there is zero incentive to prepay 100% whereas before you'd get the writeoff so it would be foolish for any airline to put up 100% under the current system without some sort of incentive (time value of money).

I believe there is incentivization via a lower prepurchase price if one chooses to pay upfront.

Well that's your problem then. A political party might think a coalition government sucks, but is that a reason to complain about other parties reaping the rewards of teaming up? You can get more than one 787 per month as well, you just have acknowledge the social component of this game.

This is all about choices. You chose the path without team inflicted restrictions. You surrendered the advantages team play gives when you decided that the disadvantages outweigh them for you. You can't have it both ways.

As this is a simulation that is meant to be representative of the real dynamics of the airline industry, and as major airlines don't purchase aircraft and production slots for other airlines in their alliances, to not adjust the system would allow continued exploitation of the inherent flaws of the system. Surely you and your top performing friends support realism, don't you Saftrucht?

Offline LemonButt

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Re: New Aircraft Resell Limitation
« Reply #8 on: January 28, 2014, 10:32:05 PM »
As this is a simulation that is meant to be representative of the real dynamics of the airline industry, and as major airlines don't purchase aircraft and production slots for other airlines in their alliances, to not adjust the system would allow continued exploitation of the inherent flaws of the system. Surely you and your top performing friends support realism, don't you Saftrucht?

Yes, but not everything can be simulated properly as it would make the game unplayable (like landing slots).

saftrucht--not everyone has time for, or cares about, the social aspect of the game.  That shouldn't put them at a permanent disadvantage.  AWS is like Fantasy Baseball--it's like having a second wife because it takes up so much time/energy.  Some players just want to spend 15-20 minutes/day tending to their airline and if the a production line opens up and within 24 hours has a 5 year backlog, the games isn't too fun for casual players.

Offline Infinity

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Re: New Aircraft Resell Limitation
« Reply #9 on: January 28, 2014, 10:39:29 PM »
Surely you and your top performing friends support realism, don't you Saftrucht?

The game isn't realistic, the demand structure is crazily out of any proportion, so why should anything else be kept realistic? This is not a simulation, it is a game, and that's the way it works as it is.

BD

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Re: New Aircraft Resell Limitation
« Reply #10 on: January 28, 2014, 10:54:19 PM »
Not sure how Sami tracks them all, but there seems to be a few requests related to the overall problem of the limits on production lines create an unfair/unintended exploit that favors early successful airlines.

Rather than treat the consequence of that issue after the fact, wouldn't we be better off addressing it where it occurs.  For instance, here is an interesting one:

http://www.airwaysim.com/forum/index.php/topic,48705.0.html

It looks to give small/newer entrants and large airlines the same footing on orders for newly announced aircraft.

ucfknightryan

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Re: New Aircraft Resell Limitation
« Reply #11 on: January 28, 2014, 10:56:53 PM »
Yes, but not everything can be simulated properly as it would make the game unplayable (like landing slots).

saftrucht--not everyone has time for, or cares about, the social aspect of the game.  That shouldn't put them at a permanent disadvantage.  AWS is like Fantasy Baseball--it's like having a second wife because it takes up so much time/energy.  Some players just want to spend 15-20 minutes/day tending to their airline and if the a production line opens up and within 24 hours has a 5 year backlog, the games isn't too fun for casual players.

I honestly think resale restrictions of any kind are not going to change that for certain types.  The commonality system forces large airlines into as few types as possible and at certain points in the timeline there just aren't very many possible aircraft for them to order for certain sizes, and since there are hard caps on production line rates those lines are always going to be backlogged as hell.  The DC-10, B767, DC-8, and B727 all fit that bill.   The 787 also does, because currently the game ends too close to when the A350 starts arriving.  If the game went longer I suspect it wouldn't get so out of hand as more airlines would choose to wait for the A350.

The current commonality system also exacerbates the order backlogs for types because since large airlines can't gradually phase between the new type and the old type without getting killed they have to acquire the aircraft as fast as possible, which means the big airlines really can't afford to fall behind the end of production at all, since every additional month it takes you to get all the new aircraft you need is one additional month that every one you've acquired so far is sitting around being a money pit.  So anytime one of the big airlines orders more of a type, every single other big airline ordering that type piles in and orders more themselves.  It just turns into a giant feedback loop.

Offline Pukeko

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Re: [-] New Aircraft Resell Limitation
« Reply #12 on: January 29, 2014, 10:56:27 AM »
Maybe being a member of an alliance is not so dumb then!?

One thing to consider for those buying to sell is that they now have to pay tax on the profit. This in effect may push the prices even higher as players have to account for this when onselling.

To be honest, I don't have a problem with the current system. The whole point of an alliance is to cooperate and help each other. If this means faster fleet replacement, passing on slots etc. so be it. Obviosuly if you are not in an alliance, the only way is to form some sort of coalition with another airline which you ay want to consider although probably a lot harder to organise.

Online Jetsetter

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Re: New Aircraft Resell Limitation
« Reply #13 on: January 29, 2014, 06:50:41 PM »
The game isn't realistic, the demand structure is crazily out of any proportion, so why should anything else be kept realistic? This is not a simulation, it is a game, and that's the way it works as it is.

You're totally right Saftrucht! This is entirely implausible. In fact, why don't we get rid of the airplanes and instead schedule snack cakes? We could have Twinkies and Zebracakes and Ding Dongs plying the skies instead of airplanes, because airplanes frankly aren't as good tasting as creme filling. Utilizing your logic, why don't we just make this as entirely unrealistic as possible so that it benefits you and your tiny group of friends? You overwhelming arrogance at protecting your small group of friends so that you can have an extra 0 at the end of your airline value at the end of a game has already written off anything that you say as little more than propaganda to support YOUR means and YOUR ends with no regard to the fact that there are 300 OTHER people in the game world other than the bulls*** black and white way that you see things. Please, please, please, shut the f*** up.

Back to the topic at hand, I realize there is an endemic disconnect between fleet commonality and reality. And I wish there was scalability in this factor, because if you look at the major carriers, they're fully able to operate mixed fleets. Delta flies three overlapping types in the 150 seat segment, and yields unique operating benefits from each subset. Larger fleets should have a smaller commonality penalty because eventually you experience diseconomies of scale and there is a degree of new aircraft purchase leverage that comes with playing A vs B vs McDD.

Pending a change, I still think there is a call to impose some sort of at least tentative limitation to add balance, although I see Sami has already nixed the idea in the thread title.

Offline LemonButt

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Re: [-] New Aircraft Resell Limitation
« Reply #14 on: January 29, 2014, 07:25:45 PM »
I hope I'm able to get my popcorn before Sigma shows up...

Offline dmoose42

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Re: [-] New Aircraft Resell Limitation
« Reply #15 on: January 29, 2014, 07:39:28 PM »
popcorn - this could turn into a new year's celebration...i just hope i don't stagger too much on the way home!

for the record, what is a zebracake?  Are the stripes on the inside or the outside?

As one who's looking for a few more zeros in my CV - I agree that some modification to the production line problem is probably a good idea.  To be honest, I like the idea of a 24 hour window where all airlines can put in purchase orders and bids for priority in the lines.  That way all airlinse who want a plane that log in within a 24 hour period can have a fair chance at getting it.  However, if any airline, big or small is willing to bid a higher price for the planes they would probabilistically have a higher chance of getting their orders more quickly than the low bid - if an airline bids 10% higher, then it has a 10% greater chance of being earlier in the queue (and has to pay the higher price).  Airlines willing to wait can bid a lower price and get the planes more cheaply.

ucfknightryan

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Re: [-] New Aircraft Resell Limitation
« Reply #16 on: January 29, 2014, 07:58:09 PM »
for the record, what is a zebracake?  Are the stripes on the inside or the outside?

maybe these?
http://www.littledebbie.com/www/docs/109/?ld_product=20

of course GIS suggests something with the stripes on the inside exists too

Online Jetsetter

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Re: [-] New Aircraft Resell Limitation
« Reply #17 on: January 29, 2014, 10:26:10 PM »
maybe these?
http://www.littledebbie.com/www/docs/109/?ld_product=20

of course GIS suggests something with the stripes on the inside exists too

This. The white chocolate icing on the outside makes them superior to Twinkies in my opinion.

 

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