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Author Topic: Asian stock market crash - a sombre reality check!!  (Read 586 times)

SQ747

  • Former member
Asian stock market crash - a sombre reality check!!
« on: September 28, 2015, 08:42:58 PM »
Hi,

Ive recently returned to the game and Im after any advice available

I'm in the beginners world #2 and have just had the severe stock market crash in asia event - Love the new events! (seriously!), its nearky killed me, but it makes it loads more interesting and its been a good control costs and stop silly spending. i do think im underperforming though.

Im based in Seoul Incheon, have 80 aircraft 3 fleet types. before the crash i was managing around a 13% profit margin - reasonable and realistic, but well below others. So when the market crashed i couldn't even sustain a profit!! Is 13% a normal amount of profit for this airport and scenario, is seoul just a bad place to start? i dont have many high yield med/long routes (under 4000m) that seem to print money or even many short hauls with high demand! does that make a difference? most other successful airlines are managing 20-30%, and direct puchasing large amount of aircraft! I think im doing ok setup wise and hanevt made any huge mistakes. and Ive upped my prices do maximise profit.

Any insights appreciated!

Neil.

Offline Andre

  • Members
  • Posts: 1091
Re: Asian stock market crash - a sombre reality check!!
« Reply #1 on: September 28, 2015, 10:47:35 PM »
Welcome back to Airwaysim. :) 13% profit is good in a normal game world, 30% is very rare. Anyway, reset your prices before you increase them, so that you start on a "fresh" level. If you have a monopoly base, you can increase your prices quite a lot. It's difficult to give you any good tips when I can't see your airline. These game events are very cool and spices up the game. Usually they don't have a very long effect though, so you should be back on your feet soon.

Offline Lakitel

  • Members
  • Posts: 51
Re: Asian stock market crash - a sombre reality check!!
« Reply #2 on: September 29, 2015, 05:31:00 PM »
 Welcome back to AWS :).

 Generally speaking, beginner worlds are quite easy, so you shouldn't be massively impacted by events. As Andre said, it's hard to give you advice without being in the game world and seeing your airline, but there's some things to consider:

1. Once you reach 30 or 40 aircraft, you should start focusing on owning aircraft, rather than leasing. Buying new is really only worth it if you are buying a large order, you're better off focusing on the Used Market first. In fact, in GW1 that I'm in, I have 80 something planes and they are all bought off the UM. Depending on what planes you fly, the leasing costs can really hurt you.

2. A large part of this game (as I'm sure you know) is micro-managing schedules and prices. You actually shouldn't aim for an LF of 100%, instead, focus on an LF of 75% - 80%. So if you have any routes with an LF of 90% + you can comfortably increase prices by 10% on them.

 RI plays a big part in the LF, and if you are flying any new routes with a low RI, you can just wait a while on them before changing prices, or you could run a marketing campaign for that route to make the RI climb faster.

3. There are three major traps that people fall in that I've seen so far: (a) Borrowing too much money that they can't handle (b) Expanding too fast (c) Not considering the price of fuel.

 Now, in the beginner GWs fuel prices don't fluctuate that much, but you should keep that in consideration, because it plays a large part in the normal GWs.

4. You really want to be flying the right planes for the right route. For example, there's no point flying an MD-90 on a 300NM route with 150 demand, you're better off going with 2 ATR 72s.

-------

Anyway, I'm sure you know most of that advice, just though it would be nice to maybe give a bit of a refresher :).

 Honestly, the best thing I can tell you is to try and increase your profit margin, and most importantly, try and have some money in the bank. Events can really hurt your wallet, so having a healthy amount of money to fall back on can really mean the difference between surviving and BKing.

SQ747

  • Former member
Re: Asian stock market crash - a sombre reality check!!
« Reply #3 on: September 29, 2015, 11:35:08 PM »
Thanks for the advice.

I didn't know about the 75-80 LF rule. I will need to increase prices as many routes have above 90 load factor (i could could add more frequencies on some).

Of 88 aircraft, I own one A320! and have orders for 30 x A320neos and 45 350's - all leased - I've just realized that the high lease costs alone on brand spanking new planes may overtake any fuel saving advantages and kill my profits!

May concentrate on converting leases to purchases, but could also just cancel (at the cost of a $billion or so!) and consolidate my current fleet.

Neil

Offline Cardinal

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  • Posts: 967
Re: Asian stock market crash - a sombre reality check!!
« Reply #4 on: September 30, 2015, 12:56:47 AM »
I've just realized that the high lease costs alone on brand spanking new planes may overtake any fuel saving advantages and kill my profits!

I'm a big fan of following the Delta model. Balanced mix of new planes with low fuel burn and cheap middle-aged metal with low ownership cost.

Offline Lakitel

  • Members
  • Posts: 51
Re: Asian stock market crash - a sombre reality check!!
« Reply #5 on: September 30, 2015, 09:51:08 AM »
Thanks for the advice.

I didn't know about the 75-80 LF rule. I will need to increase prices as many routes have above 90 load factor (i could could add more frequencies on some).

Of 88 aircraft, I own one A320! and have orders for 30 x A320neos and 45 350's - all leased - I've just realized that the high lease costs alone on brand spanking new planes may overtake any fuel saving advantages and kill my profits!

May concentrate on converting leases to purchases, but could also just cancel (at the cost of a $billion or so!) and consolidate my current fleet.

Neil

 I don't know if I would call it a "rule" more of a trick to help increase the income a little bit :P. If you are going for an airline that has 100% LF, then it doesn't help much. As long as your at around 75-80% you can hit the sweet spot between maximum income, and maximum load.

 And yeah, you absolutely should focus on owning aircraft, at least half, as Tvdan suggested. You don't have to cancel the ones you are getting, but make sure from now on that you focus on buying airplanes, and preferably from the UM to begin with. I mean, it's better to break even on those leased planes, and spend that billion on buying out planes you already have leased, or creating new routes with planes you've bought.

 As for converting leases to purchases, its a complex issue. Don't bother buying out an aircraft if it has a very long lease on it; you have to pay for breaking the contract, and basically all the years that you broke the lease for. As you can imagine, it can really cost you a pretty penny. Also, don't bother buying aircraft that are really close to their D check, anything less than 2 years away is asking for trouble, especially when you consider that D checks can cost millions.

 The best strategy I would suggest is to look through your leased planes. Those that are close to D check, let the lease run out. Those that have a very long lease (2 years + roughly), don't buy out, either way for the lease to run out a little or just let the lease run out. The airplanes that have a short lease, and are far away from D check are the primary planes you should be aiming for. *

 Also, a nice thing to do is when you let a lease run out, you can replace that planes with one you bought off the UM. It doesn't require you to figure out new routes and it "converts" a leased plane to an owned plane. So its a basic switch.

 Finally, I'm not quite sure how used you are to the used market, but you should be aware that you can't lease/buy more than 2 airplanes a day, and 3 airplanes in a week.

Edit: * You should keep in mind that the game automatically extends leases if they finish, so you have to keep an eye out for that :P. You can switch it off, and the game should message you when you get really close to running out the lease.

I also want to add that I'm insanely tired and about to pass out, so if some things don't make sense, just point them out and I'll clarify when I wake up :P
« Last Edit: September 30, 2015, 09:54:50 AM by Lakitel »

Offline gazzz0x2z

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  • Posts: 1382
Re: Asian stock market crash - a sombre reality check!!
« Reply #6 on: September 30, 2015, 11:46:36 AM »
The idea for LF is that as it varies from day to day, if you are above 90%, some days, you'll miss passengers wanting to fly your company. And that's bad.If LF is below 90%, it's rare enough. On most 150-seater lines, there is not much difference in income between 65% & 90% LF. But above & beyond is a lot of money to be made.

Note that if you fly small jets with low-cost seats, you'd better be around 90%, because LF falls massively when you increase the price just a little bit. Doesn't seem your case, but be advised that pricing politics wise for a profile of flights won't be as wise for another profile.

SQ747

  • Former member
Re: Asian stock market crash - a sombre reality check!!
« Reply #7 on: October 03, 2015, 08:23:47 PM »
Well after some reconfiguring of aircraft size/route allocation, price adjustments and consolidating costs and increasing route/company images profit has increased by around 120-150% depending on the week.

I've decided not to purchase any existing leased aircraft, and am instead converting as many of my new orders from leases to purchases - especially since these start arrive next year. I should get better than 50% of my Neos purchased and perhaps 30% of my A350's purchased, though I may just focus more on the A350's as it will make the most difference. I will only have short leases on my current fleet so they should all be ready to cycle out or purchase at short notice.

I'm still growing with the occasional aircraft/route being started.

thanks for all the tips!
« Last Edit: October 03, 2015, 08:39:05 PM by SQ747 »

 

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