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Author Topic: Can You Finally Run An Airline With Turboprops?  (Read 1371 times)

Offline Jetsetter

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Can You Finally Run An Airline With Turboprops?
« on: June 02, 2014, 01:03:38 AM »
No.




Offline Mr.HP

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #1 on: June 02, 2014, 01:33:12 AM »
Yes, it's very much possible

First, most of your routes can supply only one daily flight. It takes at least 6 months for those routes to start getting decent LF, thus revenue

Second, you quickly fill to 100% capacity of big routes to LAS and LAX, but pax haven't been aware of your service yet, so all of your flights suffer from low LF. If you only fly once or twice daily, those flights would be full easily. Take an example of SLC, demand is 100, so only about 20 pax know about your service at RI = 0, so your only flight there will give you 60-70% LF. But you put 3 daily flights there, so each flight get like 7 seats sold -> bad business

Third, take a look at how much you've spent on marketing. You will never have high CI with that scale of operation (meaning small airlines will never get 100 CI), so no matter how much you've spent CI won't rise pass certain level. In addition, never spend more than 10% of your revenue in marketing

Last, small A/C airlines tend to start up very slowly, so keep more cash in reserve, don't spend them all in A/C and slots

Hope this helps

HP

Offline Sanabas

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #2 on: June 02, 2014, 05:00:31 AM »
Yes, it's very much possible

Sure is. http://www.airwaysim.com/forum/index.php/topic,42466.msg230312.html

In fact, 500+ turboprop fleet should be completely doable in either US or Europe now with the changes to basing.

Quote
Third, take a look at how much you've spent on marketing. You will never have high CI with that scale of operation (meaning small airlines will never get 100 CI), so no matter how much you've spent CI won't rise pass certain level. In addition, never spend more than 10% of your revenue in marketing

I think it's probably not practical for a turboprop airline to take CI over 30.

Quote
Last, small A/C airlines tend to start up very slowly, so keep more cash in reserve, don't spend them all in A/C and slots

I disagree with that, especially if you have a few 300+ routes to start on. You should be looking to be profitable quite early, same as any other airline. It's just the scale of the profits that are smaller, so growth is slower.

Offline Sami

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #3 on: June 02, 2014, 07:29:39 AM »
No.

Airline that is 3 months old and no route image is higher than about 35, so WAY too early to judge anything.

Offline Jetsetter

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #4 on: June 02, 2014, 02:18:46 PM »
I'm hovering at about 25 to 30 CI, which serves a decent enough margin to weather bad CI weeks. I could ditch some of the marketing but I want some range between that deadly 0 figure.

In regards to scheduling, it's not like there is much room for improvement. There's a pretty limited number of airports within 500 NM of my base, and I'm typically used to booting up some 737's and seeing profits by now. The routes are going to be inundated with frequencies pretty quickly. I'm showing pretty healthy load factors across the fleet, most ranging around the 70 percentages. The most worrisome for me is the salary expense. I've never messed around with the salaries before, and I'm concerned that it will take up an inordinate amount of time to manage.

Offline Sanabas

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #5 on: June 02, 2014, 03:02:19 PM »
I'm hovering at about 25 to 30 CI, which serves a decent enough margin to weather bad CI weeks. I could ditch some of the marketing but I want some range between that deadly 0 figure.

Based on your screenie, your marketing budget is absurdly high, and really hurting you.

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In regards to scheduling, it's not like there is much room for improvement.

We can't tell without pictures of scheduling and/or more info about it.

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There's a pretty limited number of airports within 500 NM of my base, and I'm typically used to booting up some 737's and seeing profits by now. The routes are going to be inundated with frequencies pretty quickly. I'm showing pretty healthy load factors across the fleet, most ranging around the 70 percentages.

Where are you based? There's not much point attempting to build a decent sized turboprop airline out of an isolated airport that can only support 5 turboprops.

Quote
The most worrisome for me is the salary expense. I've never messed around with the salaries before, and I'm concerned that it will take up an inordinate amount of time to manage.

Takes almost zero effort. Uncheck 'auto-raise salaries', and when you get a message saying a particular group wants a higher salary, you set their wage to default. That's it. Will stop wages auto-increasing, save some money. Your staff payments are on the high side in that screenie, but I'd guess that's more to do with lack of revenue.

Offline Jetsetter

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #6 on: June 02, 2014, 03:27:04 PM »
Scheduling isn't my problem, its the variety of destinations within 500 NM, or the range of the Saab. I've adjusted the marketing budget since to knock off a third, but with so many delays I really don't want to dip the 0 mark on a bad week.

Base is OAK, so probably the highest density of 500 NM destinations with demand in North America.

Offline LemonButt

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #7 on: June 02, 2014, 03:46:47 PM »
I am flying the gas guzzling CRJ200 exclusively in GW2 and have 240 of them with maximum 52 seats and was turning 15% profits when fuel was over 1000, so the answer is that you can absolutely fly turboprops profitably.

And if you think OAK is the highest density of 500nm destinations with demand in North America you are mistaken.  CVG is hands down the number one airport IMO as 60% of the US population lives within a 500nm radius.  Even then, the western US is way more spread out than the eastern US and your destination options by basing in the east versus west are at least doubled.

Offline Mr.HP

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #8 on: June 02, 2014, 04:36:50 PM »
Base is OAK, so probably the highest density of 500 NM destinations with demand in North America.

OAK is a bad choice for an all turboprop airline. I went for RDU for an upper level regional airline (got A320, CSeries and CRJ) in last GW3 and was quite successful. BNA is a good choice, too

Offline Sanabas

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #9 on: June 02, 2014, 04:55:33 PM »
Scheduling isn't my problem, its the variety of destinations within 500 NM, or the range of the Saab. I've adjusted the marketing budget since to knock off a third, but with so many delays I really don't want to dip the 0 mark on a bad week.

Base is OAK, so probably the highest density of 500 NM destinations with demand in North America.

Saab's range is ~1200 NM with a 48/2 config. Not that flying 1000+ is a great idea, it's significantly less profitable than the shorter routes. Your CI will not drop that fast, you don't need to worry about it hitting 0. You should drop your marketing to ~10% of your revenue at most, and see what happens to CI over the course of 3 months.

As others have said, OAK probably isn't a great spot for finding lots of routes within 500 NM. Cities in the NE are probably your best choice.

Did join gw3 briefly to have a quick look. I assumed you were using the Saab 2000, not the 340B. Your fleet utilisation is decent, so scheduling probably isn't a big issue. I think it's just a base that doesn't have a heap of demand, coupled with spending way too much on marketing, that has quickly sent you into a hole that you may not be able to climb out of.

Incidentally, starting cash in Buffalo, which I think is still size 5, but not a very large size 5, is now almost $18 million. Building a successful all-turboprop airline should be very, very doable with that.

Offline fluffybunny

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #10 on: June 03, 2014, 01:04:14 AM »
Yes, it's very much possible

First, most of your routes can supply only one daily flight. It takes at least 6 months for those routes to start getting decent LF, thus revenue

Second, you quickly fill to 100% capacity of big routes to LAS and LAX, but pax haven't been aware of your service yet, so all of your flights suffer from low LF. If you only fly once or twice daily, those flights would be full easily. Take an example of SLC, demand is 100, so only about 20 pax know about your service at RI = 0, so your only flight there will give you 60-70% LF. But you put 3 daily flights there, so each flight get like 7 seats sold -> bad business

Third, take a look at how much you've spent on marketing. You will never have high CI with that scale of operation (meaning small airlines will never get 100 CI), so no matter how much you've spent CI won't rise pass certain level. In addition, never spend more than 10% of your revenue in marketing

Last, small A/C airlines tend to start up very slowly, so keep more cash in reserve, don't spend them all in A/C and slots

Hope this helps

HP

Thank you for pointing out about marketing, I had mine at about 20% and was loosing money every week, canceled my marketing next week in the green.  Helped me a lot with that little tip.

Offline Infinity

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #11 on: June 03, 2014, 04:10:21 AM »
Base is OAK, so probably the highest density of 500 NM destinations with demand in North America.

Quite the contrary, actually. OAK, as all West Coast cities, has a very poor number of close proximity destinations and those that are there have very poor demand.
Try a city in the Midwest or so if you want to see if a prop airline can work.

Offline meiru

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #12 on: June 07, 2014, 10:35:04 AM »
in KSFO you can fly up to 26 ATR's (I flew 22 ATR72 and 4 ATR42) and then all routes are full for this type of aircraft... smaller routes dont exist there (or, not enough) ... bigger have to be flown by MD-80/90, 737, A320 ... I found out, that there's much more demand for such aircrafts around KSTL or even more in the east...

Offline knobbygb

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #13 on: June 08, 2014, 12:55:35 PM »
Quote
As others have said, OAK probably isn't a great spot for finding lots of routes within 500 NM. Cities in the NE are probably your best choice.

I find the midwest works quite well too.  Especially with Saab 2000s where you can push the range a little once you are making a nice profit.  I seem to remember having an operation in MEM with bases in STL and then HOU or DAL and operating about 300 Saab 2000s, no jets.  I had more money than I knew what to do with and that was under the "old" conditions when turboprop airlines would have been harder.  It should work even better now. Give it time.

I think the key to running such an operation is to make sure there are enough routes of an appropriate length for overnight flights, to keep your utilisation REALLY high.  You need plenty of destinations around 500 to 700 miles to BOTH the east AND west to allow the most efficient scheduling and to avoid running out of those 23:55 slots too! Hence the middle of the country should work better. Time zone -6 is ideal for that.  You gain the hour when flying overnight to the east coast and gain again when returning from Denver, Arizona and Texas overnight.  There is less competition at these midsize airports too which still being plenty enough demand for a 60 seater.

Offline Jetsetter

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #14 on: June 08, 2014, 01:26:13 PM »
I think the Saab 2000 is a scale larger than what I want to try out. Saab 340's are cute, yes they are, yes they are, and I want to make a run at it in the sub 40 seat category. Also, I've bankrupted three times and I don't want to pay five more credits to try again. This is really an experiment of flying in the margins.

Offline meiru

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #15 on: June 08, 2014, 02:07:35 PM »
Props from about 20 to 60 seats work great in AWS... mainly because it's impossible to operate anything cheaper than this and because pax doesn't chose flights they way they would in real life. ATR, Saab and Dash-8 are very very close together from that standpoint. If the fuel goes up a little bit or down, one day you have an advantage with one type, the next day with the other. So... even with massiv competition. It's almost impossible to bk if you do it right... but, this fact is also a point that makes the game a little bit boring... at least for me. That's why I left all worlds... passengers in AWS are simply completely stupid guys.  :-\

Offline 11Air

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #16 on: June 08, 2014, 02:19:18 PM »
I've had some success upgrading the seating in the Saab340's, mainly to increase the range when I was running out of worthwhile routes. The result was good earnings because the Price per seat is higher, plus you get to tap some Club/business Class traffic but don't do more than a row, you loose the flexibility because they can only make decent money with some good LF's.
Saab2000's are tricky. There again the Saab340 mid range seating can prove a route will give decent LFs before you commit to a Saab2000. And tweaking their seating can give you a lot of capital cities, [EDIT] but they don't do Club Class traffic. (See below). But prove these routes with the 340 then buy 2000, which are faster so tweak the flight times so landing time is the same at both destinations, this may save you paying for another set of slots. Enjoy.

All TTP is possible but why. As a core business it's great but jets expand your range so much, though there's no rush to go there early on.
« Last Edit: June 08, 2014, 04:47:40 PM by 11Air »

Offline knobbygb

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #17 on: June 08, 2014, 03:16:25 PM »
Quote
plus you get to tap some Club/business Class traffic

Ah, don't forget you can't put business class seats in a Saab 340.  Only aircraft with a maximum capacity over 50. That's a major downer for some of the small aircraft.

Offline Sanabas

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Re: Can You Finally Run An Airline With Turboprops?
« Reply #18 on: June 09, 2014, 04:42:39 AM »
I think the Saab 2000 is a scale larger than what I want to try out. Saab 340's are cute, yes they are, yes they are, and I want to make a run at it in the sub 40 seat category. Also, I've bankrupted three times and I don't want to pay five more credits to try again. This is really an experiment of flying in the margins.

Also quite easy to run an airline with 34 seaters like that. Provided you're sensible about picking your airport.

 

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