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Author Topic: Global Events  (Read 904 times)

Offline we74

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Global Events
« on: April 11, 2014, 09:07:30 AM »
Bird Flu outbreak Europe. Just a reflection,if you are a start up airline and this hit you, you probably do not survive. Especially if you have competition at a base. I'm seeing some bankruptcy already. Maybe fun if you have an airline with some billions in the bank and nothing to do. Please review this before implement to other games.
My CI also took a hit downwards,seems all players did. This is not ok.
 
/ Anders W.

« Last Edit: April 12, 2014, 10:11:47 AM by we74 »

Online Luperco

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Re: Global Events
« Reply #1 on: April 11, 2014, 09:40:20 AM »
I agree. It is not fun. Don't impose you any more challenge as you cannot do much. It makes only loose money so all the plans are screwed up. If I survive, it is like starts again having loose all the money I saved to buy some more planes. And because it is a short game (should end in less than 10 game years) simple there is no time to do anything more. At least for a regional company based on minor city.

I'm passed from +3500K per week to -3000K. I cannot cut the routes as the fee to terminate the leasing of the planes is too high and the fixed expense stay high, I cannot move the planes on other routes simply because there are no more route to serve. I could only cut the marketing expenses. But at what price? My Company image will go down further lower the load factor.

In this way only the bigger and richest companies will survive. If that is what you want, it's ok. But you should tell me before I spend my credits on a regional company.
Saluti
Emanuele


Offline Kadachiman

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Re: Global Events
« Reply #2 on: April 11, 2014, 09:50:20 AM »
30% reduction in pax numbers relates to everybody not just smaller airlines.
Big airlines are not exempt, in fact big airlines can fall a lot quicker as they lose 30% of their revenue but expenses are still at 100%...so thay can lose money FAST

Example -
One of the biggest airlines in the game has dropped from 700,000 pax to 500,000 pax...yet all his expenses (staff, plane maint, etc) is at the 700,000 pax mark

Offline Sami

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Re: Global Events
« Reply #3 on: April 11, 2014, 09:58:52 AM »
This is probably the most extreme event in the catalog, or one of most severe, and does not happen that often.

The events are here to stay and add a huge level of realism,since airline business is everything else than smooth sailing and constant growth. So if there is a problem in the economy, adjust the airline accordingly!

Offline Kadachiman

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Re: Global Events
« Reply #4 on: April 11, 2014, 10:02:01 AM »
I think it is a great addition to the game.
Basically if your airline fails due to a 3 month 30% reduction in pax then you had the wrong strategy or failed to adjust to suit demand e.g. no access to funds (cash or loans) etc

Offline Xflash

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Re: Global Events
« Reply #5 on: April 11, 2014, 11:30:13 AM »
Yes Kadachiman is right.. I lost about 230K pax per week (from 690K to 460k) and it hit my balance real hard.. from 30 mio + to about -5 Mio per week atm. But i have saved some money so I can survive. Keep in mind to save about 3-4 Month incomes and dont play at nearly 0 reserves.

I like the events even this hit hard ;)

Offline NorgeFly

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Re: Global Events
« Reply #6 on: April 11, 2014, 12:25:06 PM »
I agree this is a huge challenge for any airline, not just the small ones and reinforces the importance of making sure that your airline has a reasonable cash reserve. The only airlines that will fail as a result of this kind of event will be those that have spent all their money and have no buffer.

That can affect large airlines with hundreds of planes and hard as it hits a small newly established airline. Cash is essential... Maybe now players won't be so tempted to spend every penny they have in the belief that demand can only go up.

Offline redtails1

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Re: Global Events
« Reply #7 on: April 11, 2014, 12:26:31 PM »
These events don't belong in short term games.  There is little time to recover and makes those who want to enter the game lose quickly--- that's why there is less than 50% participation of those who want to pay for humiliation.  How about some free credits for long term players?

Offline CUR$E - God of AirwaySim

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Re: Global Events
« Reply #8 on: April 11, 2014, 12:37:47 PM »
Events like this don't hurt a healthy airline to death.

A healthy airline has
- not oversupplied all routes and if so, many cash cow routes are involved in this oversupply strategy
- has cash reserves in the bank for a fuel spike, a new aircraft model be released or any other unforeseen event of at least 10% airline value up to 100 Millions value, 5% up to 500 Millions and 1% over that
- has zero loans and a good rating as last line of defence



What do some of you think happened with start-up airlines end of 2001? Or 2008 during the financial crisis? That's easy: They went bust.

A solution is also not to radically start doing weird things. The events all have a time span announced that is correct enough to give you an idea. A three month event would not make me cancel leases, it would probably not even make me to store too many owned aircraft because lost route Image is more expensive to rebuild than just sitting it out.



One thing I have to admit here:
I'm not sure if I like how fast the event fired. The curve of decreasing pax should have been a bit more smooth and not this radical.


Two further informations about the events:
If sami hasn't killed off the super-extreme-oh-please-no bird flu that is a good bunch worse than this, this is the - by far - worst negative event. Don't forget, there are positive events, too, even I haven't seen one yet. :)

And, additionally, in full gameworlds it would just have affected a single continent, so a smaller number of airlines and a good part of those airlines have probably connections to other continents that half-way work.




Edit:
Thanks for the feedback anyways! I'm sure sami is even more into observing this feature than I because he has the tools behind to analyze it better. So, please, keep feedback come - on this event and other events. :)
« Last Edit: April 11, 2014, 12:45:34 PM by CUR$E »

Offline Sami

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Re: Global Events
« Reply #9 on: April 11, 2014, 12:47:38 PM »
that's why there is less than 50% participation of those who want to pay for humiliation.

The events have got nothing to do with the player number (apart from perhaps this 'bird flu' event that may have pushed some already poorly managed airlines over the edge, but it's alone not a reason). Euro World was never even close to the full capacity.

The events will be enabled in all future games, short or long, and will also be implemented in all running games too like previously already announced.

Offline LemonButt

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Re: Global Events
« Reply #10 on: April 11, 2014, 01:24:15 PM »
I am not in Euroworld, but if random events can drop demand 30% etc. where players need to get access to cash, then IMO the credit/loan system needs to be addressed.  There are several examples on the bug forum of players saying the numbers are wrong.  In GW2 I have been in the top third of airlines for profitability for 5 years now and I'm still stuck with a CCC rating.  On top of that, my debt to assets ratio is less than 10% and I can't get an unsecured loan.  IRL most airlines in the game would have access to cash, whether it is an unsecured loan, secured loan against aircraft or slots, private equity firms, or even an IPO or secondary offering.

Maybe when these major world events happen, governments also respond to relax the lending requirements?  After 9/11 there was all sorts of government help to prop up the airlines and keep them flying because BKs have a ripple effect in the economy.

Offline CUR$E - God of AirwaySim

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Re: Global Events
« Reply #11 on: April 11, 2014, 01:47:45 PM »
If your airline is healthy, as I explained, even this event should not kill you off or hurt you massively.

Still the credit rating system needs some love... I made a bug report about that some weeks ago and I think it is still open. :)

Offline LemonButt

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Re: Global Events
« Reply #12 on: April 11, 2014, 02:13:07 PM »
If your airline is healthy, as I explained, even this event should not kill you off or hurt you massively.

Still the credit rating system needs some love... I made a bug report about that some weeks ago and I think it is still open. :)

Your comment got me thinking--is there such a thing as a healthy airline IRL?  I started thinking about the real world airlines and all of the non-government owned majors that went through a bankruptcy/reorganization and/or merger it seems: Northwest, Delta, American, United, (Qantas soon), etc.  By bankruptcy I mean Chapter 11 reorganization due to insolvency, not Chapter 13 liquidation.  Richard Branson once said that the easiest way for a billionaire to become a millionaire is to start an airline. So ultimately it begs the question that if an airline can survive a 30% drop in demand without massive financial intervention in AWS, would that mean AWS isn't realistic enough (too easy)?

It seems for world events like to this to truly be worthy of the game, there needs to be more options/contingency plans available other than liquidation so an airline with a strong foundation can survive, such as debt consolidation/refinancing, leaseback programs, etc.  If an airline has a 75% load factor and experiences a 30% drop in demand, that takes them to 52.5% load factors overnight.  It is very easy to be profitable and "healthy" at 75%, but nearly impossible at 52.5%.  We've got shareholder equity as a line item on the balance sheet--even a crude stock market system could be created so that CEOs have equity and can issue stock (to the bank/private equity or otherwise) and keep an airline liquid during tough times.

Don't take this as me complaining about random events, because it's not.  But right now random events are like bringing a gun to a knife fight because airlines don't have the tools to respond other than not spending cash, which isn't really an option for boostrapping young airlines expanding quickly (especially late joiners).

Offline CUR$E - God of AirwaySim

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Re: Global Events
« Reply #13 on: April 11, 2014, 02:47:58 PM »
I'm not much into airline business but Lufthansa is a non goverment owned major carrier that is, more or less, healthy.

The demand drop of 30% is also not forever. It's just for some month. The huge fuel spike in GW#4 right now is lasting for over a year yet and killed of 20 major and endless more smaller airlines. And? It's something you have to plan with. If your airline strategy bases on the fact fuel is cheap or you have a steady profit you are going to suffer.

It's exactly what we see in GW#4 right now. Some airlines stay healthy - like mine - because I didn't push myself into 20% DP orders and I kept a huge cash reserve even when I made 15-18 Millions per week, just because I knew things could change fast. Others have spent their money fast and suffered, some were able to rescue themselves, others went bust or will go bust.

Offline Kadachiman

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Re: Global Events
« Reply #14 on: April 11, 2014, 02:55:59 PM »
The issue with big drops in demand (e.g. bird flu) and / or big increases in demand (e.g. Olympics) is that an airline in this game can not respond adequately or soon enough to take counter measures

Decrease example - You can not park up slots as you will lose them
Increase example - You can not increase the number of planes you have to service special event demand soon enough (2 week minimum on UM if plane is available otherwise 4 weeks min)

Basically your only real option is to 'cash up and ride it out'

Offline Sami

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Re: Global Events
« Reply #15 on: April 11, 2014, 03:20:32 PM »
No airline is purchasing more planes due to some 4 week event like olympics (in reality at least), so rather moot point.

For short economic problems, you can safely cancel some routes for a month and then set them back, you have still then one month before slots are lost. Or swap to smaller planes if available and turndown is only regional.

Offline LemonButt

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Re: Global Events
« Reply #16 on: April 11, 2014, 03:29:53 PM »
For short economic problems, you can safely cancel some routes for a month and then set them back, you have still then one month before slots are lost. Or swap to smaller planes if available and turndown is only regional.

But the issue isn't just aircraft, is it?  I would think it would be cheaper to continue flying and recoup at least a portion of the staff (and other) expenses versus parking them.  You can't layoff staff for a month without taking a big CI hit or park aircraft and not pay maintenance on them.

If demand drop of 30% is only for one month, then it wouldn't be a big issue, but the point still stands that the tools available to respond to large negative events are very limited at this point.

In regards to the credit/loan system, the major metric most banks look at is debt to income, that is how much your debt service payments are relative to your income.  Right now in GW2 I am paying $70k/week to service my debt on $3.5 million in weekly income--a 2% debt to income ratio--which IRL I would think would be considered a "safe" investment for banks to lend money to.

 

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