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Online Airline Management Simulation
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Author Topic: [-] Regulatory Environment  (Read 636 times)

Offline ekaneti

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[-] Regulatory Environment
« on: July 19, 2009, 02:09:31 AM »
I would request an end to unlimited "Cabotage" rights. I think Fifth Freedom is fine. But I think if an airline based in the USA wants to fly internal flights in Canada, then they should be required to purchase rights to fly within Canada and open up a business office and then be limited on their flights but woudl be allowed expansion over time. Flying from USA to Canada to a third country like Japan would still be free and open but free unlimited Cabotage should end.
« Last Edit: October 23, 2010, 04:17:57 PM by sami »

toyotaboy95

  • Former member
Re: Regulatory Environment
« Reply #1 on: July 19, 2009, 02:20:47 AM »
Agreed. Huge airlines are expanding too rapidly with the help of 5th freedom (domestic). If it required some time and money, the task would be a bit more challenging and realistic.

Offline Kazari

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  • Posts: 476
Re: Regulatory Environment
« Reply #2 on: July 19, 2009, 03:00:40 AM »
I have played some simulations -- Railroad Tycoon 3, for example -- that require you to pay a great deal to access to another country (territories in RR3's case).

I think it would prove interesting if airlines were required to pay a fee to access other countries.

The downside would be twofold:

1. As always, rich airlines would have it over poorer ones.

2. It would front-load airport rich countries at the beginning of a game and hobble airport poor ones. An example would be DAAG. Although it is the largest airport on the continent, it does not have all that much of a domestic market. If someone started there, they would be hard-pressed to expand to Europe or the Middle East. And it would be disastrous for someone starting in, say, Lagos or Nairobi.

One way to mitigate would be to charge airlines a fee based on the size of their home market rather than the size of the country they are flying points between.

Offline ekaneti

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Re: Regulatory Environment
« Reply #3 on: July 19, 2009, 03:35:36 AM »
5th Freedom should be allowed, Cabotage shouldnt

Lonesome_Phoenix

  • Former member
Re: Regulatory Environment
« Reply #4 on: July 28, 2009, 01:59:20 PM »
I completely agree, Cabotage is giving the well established, rich player a very high advantage over the newly established player, its like the game is ruled by whoever started playing first (aka whoever has more money), this is a serious issue that needs to be solved soon.

I agree with Kazari's solution, making the airline pay money for making domestic flights inside another country other than their's can make them think twice, and an even better idea, make the amount they pay variable depending on the size of the aircraft, the larger the aircraft the larger the amount to pay.
« Last Edit: July 28, 2009, 02:04:08 PM by Lonesome_Phoenix »

Sigma

  • Former member
Re: Regulatory Environment
« Reply #5 on: July 28, 2009, 10:02:27 PM »
I completely agree, Cabotage is giving the well established, rich player a very high advantage over the newly established player, its like the game is ruled by whoever started playing first (aka whoever has more money), this is a serious issue that needs to be solved soon.

I agree with Kazari's solution, making the airline pay money for making domestic flights inside another country other than their's can make them think twice, and an even better idea, make the amount they pay variable depending on the size of the aircraft, the larger the aircraft the larger the amount to pay.

Not necessarily arguing against a change to Cabotage, but I think it would have the opposite effect that you describe.

If I'm one of the "rich players" I can very easily buy access to your, as a new player, region.  But you can't even enter mine, let alone try to compete against me.  I can fly all the planes I want into your region, wipe you out, and there's not a thing you can do about it.  Frankly there's not much you can do about it in today's environment either if you're that small, but at least you can try.  If you were going to do it at all, you would definitely want the fine to related in some way to the "size" of the airline, not the aircraft; and "size" would probably be best-measured in terms of Pax moved than any financial measure which can be misleading as to the overall size and threat of an airline to domestic competition.

There's also problems with going with "Domestic" as the differentiator.  A European airline would have to buy themselves right into everyone of several dozen countries, meanwhile players in the US wouldn't have to do it to a single one.  Notice that, in JA#1 at least, the largest airlines in the game are wholly (or 98%) domestic carriers.  These changes wouldn't impact them in the slightest.  And these are the "rich players" that could easily buy their ways into, say, Germany to take you out but you couldn't do the same -- particularly if your growth was greatly slowed by having to repeatedly pay fees to access surrounding nations.  The end result would be a greater concentration of all players to countries with a lot of airports in the game -- Brazil, China, Japan, the UK, and of course the US -- which would greatly diminish the diversity of the game.  You would almost definitely have to treat mainland Europe as a single entity for the sake of parity, but then that begins to beg the question of why doing it at all.
« Last Edit: July 28, 2009, 10:05:37 PM by Sigma »

DenisG

  • Former member
Re: Regulatory Environment
« Reply #6 on: July 28, 2009, 10:17:55 PM »
I agree with Sigma! What you describe is how the European airline industry worked on a nationalist interest throughout the past decades. Only today, within the European Union, they start to consolidate and keep the US airlines out as long as this process lasts, because they have been so much bigger historically due to the domestic market sizes. Imagine Belgium or the Netherlands, which have barely any other domestic airports to fly to. In order to keep competition up, I would also suggest to rather let them fly freely, but get some 2nd and 3rd hub solution, so you can still grow, when slots are limited, which is particularly the case in Europe.

Denis

Offline ekaneti

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Re: Regulatory Environment
« Reply #7 on: July 29, 2009, 03:35:38 AM »
Actually a 2nd and 3rd hub solution while popular will only result in the bigger airlines dominating more than they do currently

DenisG

  • Former member
Re: Regulatory Environment
« Reply #8 on: July 29, 2009, 09:43:26 AM »
Well, not entirely, since if you limit the hub-number, large airlines will probably choose big airports and the smaller airlines could take advantage of medium airports, which may be more profitable. At least this would be the situation for me currently in JA2. I fly from Frankfurt with a bad slot situation and a very big boy located there. If he were to choose another hub, he would probably move to Düsseldorf or Munich, while I would prefer a smaller one for me; my profitability is higher than his (in %) and this way I could keep that level up.

Denis

Offline Sami

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