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Author Topic: Flying to airports not supllied at late night  (Read 614 times)

squari

  • Former member
Flying to airports not supllied at late night
« on: August 03, 2014, 05:03:00 AM »
Hi, my question is simple. If i fly to an airport that no one is flying to, can i shedule it to late night (00-05) and still have very good load? (more then 85%)

Offline CUR$E - God of AirwaySim

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Re: Flying to airports not supllied at late night
« Reply #1 on: August 03, 2014, 06:32:02 AM »
If the demand is extremely high (maybe >1000pax/day and you send a 737-300), yes, then the load factors could be good. Usually the LF are not as good.

squari

  • Former member
Re: Flying to airports not supllied at late night
« Reply #2 on: August 03, 2014, 07:00:40 AM »
Thanks.

Offline LemonButt

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Re: Flying to airports not supllied at late night
« Reply #3 on: August 03, 2014, 01:03:13 PM »
You can get 85%+ load factors if you lower prices enough.  Approx -40% should do it if RI is high enough.

Offline CUR$E - God of AirwaySim

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Re: Flying to airports not supllied at late night
« Reply #4 on: August 03, 2014, 01:34:08 PM »
-40% prices would destroy every profit. I'd never reduce prices at all but under no circumstances -40%.

Offline LemonButt

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Re: Flying to airports not supllied at late night
« Reply #5 on: August 03, 2014, 03:19:32 PM »
-40% prices would destroy every profit. I'd never reduce prices at all but under no circumstances -40%.

Individual flight prices don't matter.  If you can fly at 2am at -40% and return at 6am at +40% with the same load factors then it is no different than flying both routes at the default price.

Attached are examples.  The first is from GW2 where default price is $219 and I'm flying $175 (-20%) and $333 (+52%) for an average price of $254 (+16%).  The second is from GW3 where default price is $162 and I'm flying $100 (-38%) and $184 (+14%) for an average price of $142 (-12%).

Offline CUR$E - God of AirwaySim

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Re: Flying to airports not supllied at late night
« Reply #6 on: August 03, 2014, 03:41:04 PM »
AWS ist not about load factors, it is about profit.

My GW#4 airline has a 240/276 LF deep in the yellow but my profit per week is higher than the #30 airline makes per quarter.



I have reasons not to go to deep into detail explanation about those things but a pricing of -40% is a very bad idea under every possible circumstance except faking a higher load factor. With standard price or maybe -10% your profit would be higher or the same as with -40%, while of course your load factors would be worse.

Offline LemonButt

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Re: Flying to airports not supllied at late night
« Reply #7 on: August 03, 2014, 05:26:11 PM »
AWS ist not about load factors, it is about profit.

I agree, but you can't have profit without filling seats and the opportunity cost of not flying during the night is zero revenue and zero profit.  The examples I just gave are profitable routes with flight pricing at -40% leaving late night so you can't say -40% is a very bad idea under every possible circumstance.  Yes, profit would be higher if I charged -10% instead, but only if load factors were high enough to generate the same amount of revenue (subtracting out variable costs like pax fees).

Additionally, you need to take into consideration slots.  When I started my airline in GW2 at ORD there were zero slots available from 500-800, thus my options were to takeoff before 500 or after 800 (or both).  You can't just make a blanket statement that load factors don't matter because the game is about profit because the two are (largely but not perfectly) correlated.

Offline CUR$E - God of AirwaySim

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Re: Flying to airports not supllied at late night
« Reply #8 on: August 03, 2014, 05:39:14 PM »
I never said flying at night should be avoided. I just said charging -40% is something one should never do. There is basically no advantage over -20%.

And yes, load factor don't matter as long as you don't go for a high place in the particular statistic. What matters is profit. Load factors over 80% are bad because it means you charge not enough for your tickets.
This might be a blanket statement. Doesn't mean it's not true.

Offline LemonButt

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Re: Flying to airports not supllied at late night
« Reply #9 on: August 03, 2014, 07:06:03 PM »
Load factors over 80% are bad because it means you charge not enough for your tickets.

Again, I can't disagree with you here.  However, if you are flying out at 230 with a 60% load factor and returning at 600 with a 100% load factor, that flight is going to show up as having an 80% load factor on the manage routes page.  I don't know how you manage prices, but if you have a life outside of AWS I assume you are managing route pairs and not each individual flight, otherwise it would be a full time job.  Thus when load factors on a route pair are >80% you raise prices for all flights on that route pair.  Otherwise, you'd have to dig pretty deep to find that 60/100% load factor flight because you should be raising the return flight prices.  This is an inherent limitation of the current system and one of the benefits of the -40% pricing because when you have 60/100 load factors instead of 80/80 you end up not raising prices because of bad/limited data and system limitations.  Not saying you are wrong, but you aren't doing yourself any favors with the current system if your outbound/return load factors have a huge delta.

For example, the first flight has 100% load factors on the ORD-DFW flight in GW2, but the route pair has a 92% load factor with 9 flights/day.  I have 634 (1264/2) route pairs which is WAY easier to manage than the 23,000+ weekly flights (3000+ flights/day) I have, so I am basing my price changing decisions on 92% and not 100%.  Hopefully the new revenue management features will make all of our lives much much easier when it comes to managing pricing AND has some built in features to help with load balancing to reduce standard deviations/variance.

I'm linking to this the revenue management thread for sami's reference.

Offline CUR$E - God of AirwaySim

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Re: Flying to airports not supllied at late night
« Reply #10 on: August 03, 2014, 07:56:32 PM »
I don't know how you manage prices, but if you have a life outside of AWS I assume you are managing route pairs and not each individual flight, otherwise it would be a full time job.

I don't believe in a life outside of AWS.

squari

  • Former member
Re: Flying to airports not supllied at late night
« Reply #11 on: August 06, 2014, 10:30:13 AM »
well in my head, it all depends if - "X" cost % will bring more then that same amount in passagers load. and vice versa. like, u cut 10% cost then load factor rises 8% that makes no sense. btw i'm making 25.000 week with one of the night routes, like half load -10% cost with some 80% peaks before competition get in soo, filling up some night slots.

Offline CUR$E - God of AirwaySim

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Re: Flying to airports not supllied at late night
« Reply #12 on: August 06, 2014, 11:09:24 AM »
Again, AWS is about profit, not about load factors.

You want to have a LF between 70 and 78% due to pricing if the route offers enough demand for a theoretical >98% LF.

Offline LemonButt

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Re: Flying to airports not supllied at late night
« Reply #13 on: August 06, 2014, 12:16:55 PM »
Also I should have added -40% is a starting point for a new route with 0 RI.  This assumes that you are raising prices as load factors get too high (as you can see from one of the examples).  If you start at default prices flying at 230, you will get a 0% load factor, which I have done more than once when forgetting to change prices while creating the route :)

Solemus

  • Former member
Re: Flying to airports not supllied at late night
« Reply #14 on: August 07, 2014, 07:48:06 AM »
Hi, my question is simple. If i fly to an airport that no one is flying to, can i shedule it to late night (00-05) and still have very good load? (more then 85%)

Hey Squari

What have you done here???? Look at all the old fogies arguing here!!!!!  ;D Ain't it always the same here ladies??? Someone asks a very simple question and you ladies have to start an argument with so many different opinions, one would have a degree in mathematics to work out some of your answers  ;) x = this y = that jeez guys it is so dang confusing for the ones that ain't got a clue what you are going on about.

Can't you guys just say yay or nay about things sometimes???  :laugh: :laugh: :laugh: :laugh:

 

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