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Author Topic: Flying small A/C  (Read 1642 times)

Offline tdf42

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Flying small A/C
« on: July 29, 2015, 07:37:49 PM »
What is the key to making money flying small A/C to low demand airports? For instance, flying a small jet to 4/5 destinations (52 capacity/ 30 demand on average) I see so many airlines with small aircraft making money..what are the dynamics? 

Offline armadillomaster

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Re: Flying small A/C
« Reply #1 on: July 30, 2015, 07:26:03 AM »
I operate smallish jets. (1-11's then onto BAe 146.)

Pretty easy if you can get a niche market

Online gazzz0x2z

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Re: Flying small A/C
« Reply #2 on: July 30, 2015, 07:46:43 AM »
the key is accurate pricing. Too high, and your LF plummets. Too low, & your profitability is a joke.

That, and the classics : full plane use, clever planning, go where others are not, etc...

Offline Teadaze

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Re: Flying small A/C
« Reply #3 on: July 30, 2015, 02:45:13 PM »
smaller aircraft have small overhead to fly most of the time. you make money but you don't make a lot.

larger aricraft can make more money if they fill up. So if you have a route with 150 passenger you would make more money with 1* 727 then 3* fokker f27.

Online gazzz0x2z

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Re: Flying small A/C
« Reply #4 on: July 30, 2015, 03:33:28 PM »
smaller aircraft have small overhead to fly most of the time. you make money but you don't make a lot.

larger aircraft can make more money if they fill up. So if you have a route with 150 passenger you would make more money with 1* 727 then 3* fokker f27.

true, but as soon as competition enters the dance, things change drastically.

There is a very short range line in GW3 with 1000 demand between 2 islands. I fly 15 daily flights with ERJs(that's 750 capacity), opposition flies respectively 10 A319 flights(around 1300 capacity) & 11 A320 Flights(around 1650 capacity). It's a bloodbath. I'm not making a lot of money, but the 2 other guys(both based at the other side of the route, fortunately for me) are probably making even less. Likely, when counting overhead, they are losing money, even if they probably transport slightly more passengers per flight than me.

That's one of the joys of the game. Under-dimension your planes, and you'll not make much money, and you'll stay small. Over-dimension them, and the opposition will reduce you into pieces.

I'm tempted to land a 4th ERJ145 there(for 20 daily flights & full demand coverage), but I'm not sure how the "1 flight per hour" works there. I've got flights at 500, 600, 700, 930, 1030, etc..... so never 2 full hours of emptyness here. So it might not be as useful to take a little bit more of the market. I'm not sure. Still, it's funny to see them fight to the death, and then to come to add some spice to the fight.

That's a competitive game, and if something is too good to be true, expect opposition to attack the position.

Offline Teadaze

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Re: Flying small A/C
« Reply #5 on: July 30, 2015, 03:55:44 PM »
true, but as soon as competition enters the dance, things change drastically.

There is a very short range line in GW3 with 1000 demand between 2 islands. I fly 15 daily flights with ERJs(that's 750 capacity), opposition flies respectively 10 A319 flights(around 1300 capacity) & 11 A320 Flights(around 1650 capacity). It's a bloodbath. I'm not making a lot of money, but the 2 other guys(both based at the other side of the route, fortunately for me) are probably making even less. Likely, when counting overhead, they are losing money, even if they probably transport slightly more passengers per flight than me.

That's one of the joys of the game. Under-dimension your planes, and you'll not make much money, and you'll stay small. Over-dimension them, and the opposition will reduce you into pieces.

I'm tempted to land a 4th ERJ145 there(for 20 daily flights & full demand coverage), but I'm not sure how the "1 flight per hour" works there. I've got flights at 500, 600, 700, 930, 1030, etc..... so never 2 full hours of emptyness here. So it might not be as useful to take a little bit more of the market. I'm not sure. Still, it's funny to see them fight to the death, and then to come to add some spice to the fight.

That's a competitive game, and if something is too good to be true, expect opposition to attack the position.

Kinda incorrect, I was making my statement about smaller aircraft can profit in lower demand (such as 50 seat), however if you have 150 demand and you have a choice of something like md80 or CRJ the md80 will win out.
It is the same for competition, if you are flying oversupply the lessor amount of aircraft you commit to the route yet still produce the same oversupplied demand, you will lose less. Especially an expensive aircraft like ERJ over a very short range in your description. Assume your route if all 3 airline provide the same amount of capacity(let's say 1000 each), and all in leased term, Most of time 320 will profit the most, while 319 should come second and you come last. This may be different if you compare a prop verses a a320.

« Last Edit: July 30, 2015, 03:57:52 PM by Aoitsuki »

Online gazzz0x2z

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Re: Flying small A/C
« Reply #6 on: July 30, 2015, 06:56:54 PM »
I don't get it. There is roughly a 33%/33%/33% load factor there. My ERJs are 55% Full. That's not much, but, it means their Airbuses cannot be more than 30% Full.

If they were 50% Full, of course they'd earn much more than my ERJs 55% Full. Even counting per seat. But While I've got 400/750 seats occupied, They've got 400/1200 & 400/1600 seats occupied. I never flew A320s, but when I fly 737s, who are similar, I don't make any money at 35%LF.

Turboprops are cool, but you don't fly them as often, so the leasing cost has to be paid by less flights. And they lack long-range capacity(besides the Q400, a near-cheat plane). There is also a non-economical, practical advantage to regional jets : when lines grow bigger, you can easily replace them with bigger jets. For turboprops, you have to reorganize everything when going to bigger planes(read : jets in the 100seats area). When a ERJ145 costs 15M$ and a Q400 the double, for only slightly superior seat.NM capacity(the Q400 is quick, but not that quick), things are more balanced than a single look at the fuel usage.

And remember : the fuel consuption is per hour, not per NM. Turboprops drink less fuel per NM, sure, but in reality, numbers are not as impressive as they look. Turboprops have their qualities, but don't be fooled : fuel is not the only thing.


Offline tdf42

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Re: Flying small A/C
« Reply #7 on: July 31, 2015, 10:11:12 AM »
Correct me if Im wrong. Your competition does not care about LF. I see most of the biggest airlines raking in billions flying at 50-60% LF. Flooding markets and flying all times of night. To me it is not realistic and one of the draw backs of the game. I only try and take a piece of the market and fill my planes and make a few bucks. I learned early  what dominating a market took and I dont like it.

Online Sami

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Re: Flying small A/C
« Reply #8 on: July 31, 2015, 10:15:11 AM »
Your competition does not care about LF.

Nobody should care about the LF really. All you are interested is the profitability.

Well, okay, that was a bit too harsh. LF is a tool for adjusting the pricing and destinations for max profits. LF 99% is bad since it means you can sell the tickets with a higher price. And LF 60% probably means you could earn more by choosing another route, or possibly (but rarely) cutting prices to gain more market share. But if you have no choices of routes, then LF60% and the probable "decent" profit it makes is good enough.

Offline tdf42

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Re: Flying small A/C
« Reply #9 on: August 01, 2015, 03:49:54 AM »
Were you offended by my statement? Do not get me wrong, I enjoy the game, but as you guys rationalize how load factor is not important and seeing big airlines fly meaningless half empty flights in the middle of the night I will use what has been told to me on other occasions when I voice my opinion..its  a game and thats it.
« Last Edit: August 01, 2015, 03:56:36 AM by tdf42 »

Offline schro

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Re: Flying small A/C
« Reply #10 on: August 01, 2015, 04:02:35 AM »
Were you offended by my statement? Do not get me wrong, I enjoy the game, but as you guys rationalize how load factor is not important and seeing big airlines fly meaningless half empty flights in the middle of the night I will use what has been told to me on other occasions when I voice my opinion..its  a game and thats it.

The number of seats sold, price the seats are sold at and the cost to operate the flight + overhead matters. Load factor is a statistic that can be derived from that information, but if you make choices based upon load factor then you will miss the forest by staring at a single tree. There are many examples where a half load factor flight will be more profitable to an airline than a full flight. The best and quickest example would be to compare a 707 (suppose around 150 seats in a mixed config) to a DC10 (supposing 300 seats in a mixed config). Suppose you place them on identical 150 pax demand routes at the same price and that happens to result in you selling 150 tickets for each flight. In that case, the 707 will run a 100% load factor and the DC10 will run a 50% load factor. However, the DC10 costs less to operate by a significant margin (specifically, fuel and pilots). Thus, the low load factor route in this case prevails from a profit perspective. If you'd like to see how this works in action, poke your head into GW4 in about 5 game years and watch the large 707 fleets splat airlines into a wall.

Offline tdf42

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Re: Flying small A/C
« Reply #11 on: August 01, 2015, 06:01:47 AM »
The example you gave is not what I am talking about. Not even close. My example... A huge multi billion dollar airline sends 300 seats to a 150 PAX demand airport. No strategy involved no weighing of cost...just flood the market. No way he gets more than 50% at a loss or small profit, what does he care? I see little sensitivity to our out loud thinking when this happens and  we small potatoes with tight costs and profit margins and not  generating high revenues probably dont deserve any, but this is frustrating and commonplace. I have had a multi billion airline when I see them neglect a route and I fill in open demand come back and try to flood me out on one of my markets that I have to myself.
« Last Edit: August 01, 2015, 06:05:03 AM by tdf42 »

Online Sami

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Re: Flying small A/C
« Reply #12 on: August 01, 2015, 12:34:44 PM »
Were you offended by my statement?

No, not at all.. (if my message had that 'tone' then it was not intentional)

Online gazzz0x2z

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Re: Flying small A/C
« Reply #13 on: August 01, 2015, 01:47:33 PM »
Still, on this line, planes carry around 30 pax each. What is more economical : carrying 30 pax with a ERJ145, or carrying 30 pax with an A320? Or even 35?

Small planes have their place, you just have to make sure you use them where they are useful. Like any other plane.
« Last Edit: August 01, 2015, 06:39:53 PM by gazzz0x2z »

Offline schro

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Re: Flying small A/C
« Reply #14 on: August 01, 2015, 02:27:07 PM »
The example you gave is not what I am talking about. Not even close. My example... A huge multi billion dollar airline sends 300 seats to a 150 PAX demand airport. No strategy involved no weighing of cost...just flood the market. No way he gets more than 50% at a loss or small profit, what does he care? I see little sensitivity to our out loud thinking when this happens and  we small potatoes with tight costs and profit margins and not  generating high revenues probably dont deserve any, but this is frustrating and commonplace. I have had a multi billion airline when I see them neglect a route and I fill in open demand come back and try to flood me out on one of my markets that I have to myself.

That's just one of the many factors in play. There are some multi-billion dollar airlines out there who are run by players that don't understand how the game works and simply luck into having a big airline. Those often survive for decades longer than they should for who knows what reason, but will often fail in a spectacular manner at some point.  Another factor is the illogical application of the fleet commonality costs - large airlines are essentially limited to 3 fleet types at any given time (i.e. when I had 950 airplanes in the mid 1980s, adding a 4th type took commonality costs from 26m/monthy to 290m/month, which would have bankrupted me if it lasted long). This results in non-optimal aircraft for some routes. For example if it's the right size demand and range for a 757, the player will probably fly something larger on it to either fill a 7 day scheduling hole for a few bucks of incremental cash with the logic that the other healthier routes on that rotation have already covered the fixed costs of doing business. The alternative would be to add the 757 as the 4th fleet type and lose your shirt.

Offline tdf42

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Re: Flying small A/C
« Reply #15 on: August 01, 2015, 07:05:57 PM »
Yes I think it will be very interesting as we near 9-11 and more oil price hikes how they will fare. The commonality is hurting me b/c I need planes to replace my DC 910 and have to use the 931 which is bigger type than I need for my regional routes but I can not afford a 3rd fleet. The life of a small airline.

Offline schro

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Re: Flying small A/C
« Reply #16 on: August 01, 2015, 07:28:32 PM »
Yes I think it will be very interesting as we near 9-11 and more oil price hikes how they will fare. The commonality is hurting me b/c I need planes to replace my DC 910 and have to use the 931 which is bigger type than I need for my regional routes but I can not afford a 3rd fleet. The life of a small airline.

The penalty for your third type is rather negligible....

Offline Lakitel

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Re: Flying small A/C
« Reply #17 on: August 01, 2015, 11:31:18 PM »
 You guys seem to be forgetting one key factor here: Frequency. As far as I understand it, given everything else is the same, the person who flies more routes will get the larger market share. That is where prop planes make a killing on SH routes.

 You also have to take into consideration that there are rules in this game that do not let you supply more than a certain amount of demand on a route per day, for the sake of fair competition. In these cases, blocking seats is a good strategy, because you can fly more routes without hitting that maximum supply (Which is 200% according to the game manual). So even though you have a lower LF on the plane as a whole, you actually get more of the market share.

 For example, I have a route where my competitor is flying more flights than me, and if I fly any more planes to that location from my available fleets, I'll hit that oversupply maximum on the first flight. In this scenario I've added 2 more flights with an ATR75, while blocking the seats on all the flights on that route to 55 (if I remember correctly). That way, I fly more frequently, and I'll get more of the market share, even though I'm not completely loading my airplanes. And the planes are in-fact making money because the overhead costs of the ATR75 is quite low, even if you're leasing it.

 

Offline tdf42

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Re: Flying small A/C
« Reply #18 on: August 01, 2015, 11:43:25 PM »
The penalty for your third type is rather negligible....
Why do you guys say that? I added ATR to fly the routes I talked about earlier and it sent my cost up 2.5 times. That is not negligible. Is it negligible if you have billions in your pocket?

Offline tdf42

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Re: Flying small A/C
« Reply #19 on: August 01, 2015, 11:50:56 PM »
You guys seem to be forgetting one key factor here: Frequency. As far as I understand it, given everything else is the same, the person who flies more routes will get the larger market share. That is where prop planes make a killing on SH routes.

 You also have to take into consideration that there are rules in this game that do not let you supply more than a certain amount of demand on a route per day, for the sake of fair competition. In these cases, blocking seats is a good strategy, because you can fly more routes without hitting that maximum supply (Which is 200% according to the game manual). So even though you have a lower LF on the plane as a whole, you actually get more of the market share.

 For example, I have a route where my competitor is flying more flights than me, and if I fly any more planes to that location from my available fleets, I'll hit that oversupply maximum on the first flight. In this scenario I've added 2 more flights with an ATR75, while blocking the seats on all the flights on that route to 55 (if I remember correctly). That way, I fly more frequently, and I'll get more of the market share, even though I'm not completely loading my airplanes. And the planes are in-fact making money because the overhead costs of the ATR75 is quite low, even if you're leasing it.
Again, point missed. You are flooding and over supplying a route..the both of you. To me that is not a strategy.

 

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