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Author Topic: Selling slots?  (Read 907 times)

Offline Yarnam

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Selling slots?
« on: September 14, 2014, 03:42:18 PM »
Are we allowed to sell slots?

Offline Xflash

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Re: Selling slots?
« Reply #1 on: September 14, 2014, 03:54:42 PM »
no

Offline Yarnam

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Re: Selling slots?
« Reply #2 on: September 14, 2014, 04:21:19 PM »
Strange. They are sold all the time in real life. So if I abandon them I lose money because they are an asset. But they are an asset I can't sell so in that case it's not really an asset.

Offline Xflash

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Re: Selling slots?
« Reply #3 on: September 14, 2014, 04:55:12 PM »
this isn`t real life. In this game it`s not allowed.

http://www.airwaysim.com/game/Manual/General/Rules/

jackpot

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Re: Selling slots?
« Reply #4 on: September 14, 2014, 05:05:58 PM »
I'd love to see this feature. If it was me designing this feature I would have it in the form of an auction with the following guidelines -

An open auction for all airlines (not restricted to alliance members only)
A minimum time auction to be active (eg 30 game days)
A minimum time slots had to be used before being listed for sale to avoid people buying slots and selling straight away (eg flown for at least 3 months before eligible for sale)

It would be a way for airlines to raise money when struggling as as mentioned although classed as an asset, it has no sell on or investment value.

Offline Yarnam

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Re: Selling slots?
« Reply #5 on: September 14, 2014, 05:18:43 PM »
If they're not tangible I don't believe they should be classified as an asset. Maybe an accountant can chime in on that issue.

But I also believe the whole slot system needs a rework anyway. New people can't get near Heathrow which simply just isn't realistic. Airports actually encourage new airlines to use them. They don't turn them away because of slots. They find the slots for new airlines. Well in Canada they do, I guess I better not speak for the rest of the world. Anyway the slot system isn't very good in my opinion though it was an excellent addition to the game, just not the way they are now.

Solemus

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Re: Selling slots?
« Reply #6 on: September 14, 2014, 10:25:34 PM »
this isn`t real life. In this game it`s not allowed.

http://www.airwaysim.com/game/Manual/General/Rules/

Like most games online some people take them literally and forget they're a game  ::) ::)

Offline Yarnam

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Re: Selling slots?
« Reply #7 on: September 14, 2014, 10:56:44 PM »
Like most games online some people take them literally and forget they're a game  ::) ::)

Was that directed at me?

Solemus

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Re: Selling slots?
« Reply #8 on: September 15, 2014, 09:42:37 AM »
Was that directed at me?

No Yarnam, I am on a lot of forums, mainly war games, and there are people that take games too literally. 

chris.abrams67

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Re: Selling slots?
« Reply #9 on: September 15, 2014, 11:38:19 AM »
If they're not tangible I don't believe they should be classified as an asset. Maybe an accountant can chime in on that issue.

But I also believe the whole slot system needs a rework anyway. New people can't get near Heathrow which simply just isn't realistic. Airports actually encourage new airlines to use them. They don't turn them away because of slots. They find the slots for new airlines. Well in Canada they do, I guess I better not speak for the rest of the world. Anyway the slot system isn't very good in my opinion though it was an excellent addition to the game, just not the way they are now.

Absolutely agree.

As it is, they should be expensed. They have no intrinsic value. They are not resaleable, and have no place on the balance sheet until they are.

They give a false valuation the the airline. I might have $50m of debt, and $100m of assets, but if they are all unsellable slots, my assets are worth nothing.

In RL, if I was a lender, I might look at that airline and think it was worth the risk because I would get 50c on the $ back if it went bust, I would be wrong.

To look at it in an AWS example. Say I set up an a/l early in a GW from LHR, I buy lots of slots, make a good living, but then make bad a/c choices I will BK and those slots go to the fastest mover. If I could sell some, downscale and restructure then the market has been freed up and my game interest continues. It happens in RL too. Small regional a/ls have rebuilt their a/l on the basis of selling LHR slots.

If the ability, within AWS is not there to enable trading of slots on an open auction basis is not there then they should just be expensed and written off.

It would make sense to allow open trading as it would get away from any secret, under the counter trading or swapping that many suspect goes on within alliances and make the busy airports less closed shops as people merely wait for slot drops.

This is the one aspect of the game that I think is a real error.

(Oh, and I think there should be a ticker, or list, of a/c trades - it would show what the going rate for any model really is, open up opportunities for a/l to offer a/c to potential buyers and close a door to intra-alliance dodgy trades. - Sunlight is the best disinfectant)

Offline Sami

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Re: Selling slots?
« Reply #10 on: September 15, 2014, 11:48:04 AM »
The whole "slots as assets" thing has been fully discussed already when the new accounting system was made in late 2013 / early 2014.

In real life it's a rather new thing to include them as assets, and some airlines do it and others don't (and generally a very "mixed bag" where there's no clear global method). One approach of the many possible choices for them was chosen here and the accounting basis for those won't be changed in any foreseaable future.
« Last Edit: September 15, 2014, 11:51:28 AM by sami »

Offline Yarnam

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Re: Selling slots?
« Reply #11 on: September 15, 2014, 03:31:03 PM »
No Yarnam, I am on a lot of forums, mainly war games, and there are people that take games too literally.

Understood and agreed :)

Offline Yarnam

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Re: Selling slots?
« Reply #12 on: September 15, 2014, 03:42:33 PM »
In real life it's a rather new thing to include them as assets, and some airlines do it and others don't (and generally a very "mixed bag" where there's no clear global method). One approach of the many possible choices for them was chosen here and the accounting basis for those won't be changed in any foreseaable future.

My only complaint is if you choose to classify them as an asset then they should be tangible. Given that they are not tangible then you should have chose the other accounting method. When you can't sell something or prove it's worth once you acquire it then it is a straight expense of doing business. I'll give you an example. All of my aircraft have some fuel in them as they sit around. That fuel is mine and has a value BUT it is not practical to pump it out and sell it (not to mention illegal in some jurisdictions). As such it is not an asset but instead a straight expense. Using your accounting method I should get an asset value of that fuel every night. Again I'm not faulting the method you chose, it's just that it doesn't follow proper accounting rules whereas if you had chosen the other method (operating expense at time of purchase) then this would follow proper accounting procedures.

chris.abrams67

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Re: Selling slots?
« Reply #13 on: September 15, 2014, 03:54:40 PM »
The whole "slots as assets" thing has been fully discussed already when the new accounting system was made in late 2013 / early 2014.

In real life it's a rather new thing to include them as assets, and some airlines do it and others don't (and generally a very "mixed bag" where there's no clear global method). One approach of the many possible choices for them was chosen here and the accounting basis for those won't be changed in any foreseaable future.

You've said this before, and I understand. I wasn't part of, or aware of the earlier discussion at the time, and I appreciate I missed the boat. Tant pis. My bad.

However, I still believe that the decision on the accounting treatment is wrong. It doesn't actually make sense to not expense them if you can't sell them. It is a worthless asset and should be written down as such. Although I bow to your better knowledge of international accounting (I'm not being sarcastic there, even though it might sound it!) if there are airlines that carry an asset in the books that they can't realise, I thought the the general principal is that assets are carried at the lower of acquisition cost or net realisable value, which, in this case would be zero. However, slots can now be traded (for at least 10 years now) and I guess if they are carrying them on their balance sheet it is because they can realise a value.


Offline LotusAirways

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Re: Selling slots?
« Reply #14 on: September 15, 2014, 05:58:50 PM »
My only complaint is if you choose to classify them as an asset then they should be tangible... When you can't sell something or prove it's worth once you acquire it then it is a straight expense of doing business.

Hi Yarnam,
How is Iceland? You seem to open-close-open rather often.

1) There are many intangible assets. For instance brand names (Coca Cola, Apple, etc.) and intellectual patents. Also, cash is today mainly intangible and it is an asset.
2) When you can't sell something that doesn't mean it has zero value. For instance, a Picasso with no takers in an auction. Also, cash is an asset and you can't sell it.

Stay well.
LA
« Last Edit: September 16, 2014, 01:32:38 PM by LotusAirways »

chris.abrams67

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Re: Selling slots?
« Reply #15 on: September 15, 2014, 06:24:41 PM »
There are many intangible assets. For instance brand names (Coca Cola, Apple, etc.) and intellectual patents.
When you can't sell something that doesn't mean it has zero value. For instance, a Picasso with no takers in an auction.

LA

 

It's not a question of tangible and intangible assets. Just because you can't touch them doesn't mean you can't sell them.

Coca Cola could absolutely sell the brand to another drinks manufacturer and still make fizzy drinks. Apple could sell the brand and still make over rated electrical items, in fact, the thing that the things you mention have a common thread, they are ALL realisable and have a value independent of the physical asset.

Slots cannot be sold. They have no value. They have no place on a balance sheet.

The slots, in this game, are a licence, and therefore an expense.

And I would argue you're wrong about the Picasso, if there is no one to buy it, it has no value. There WILL be a price that someone will pay for it, and THAT is its value. It's whatever anyone can/will pay for it. I might have a fantastic house, that COST me $2m to build, but I chose to build it in the worst part of town, no one wants to buy it because it's in a such an dreadful part of town, that has NO value. And is worth nothing. It should be valued at the lower of cost or net realisable value. It cost me $2m to build, no one wants to buy it, its net realisable value is ZERO, THAT is what it is should be in the books at.



« Last Edit: September 15, 2014, 06:29:32 PM by ellandrd »

Offline Yarnam

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Re: Selling slots?
« Reply #16 on: September 18, 2014, 04:54:59 PM »
Hi Yarnam,
How is Iceland? You seem to open-close-open rather often.


I'm still learning thanks. Most of the things I did in beginner world I found have no relevance in the real world games. Slots for example, they are a real pain in the butt in the real world games.

 

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