The Commuter Model

[DenisG]

As Rushmore has launched his attempt some time ago to see how a CRJ-business model may work, I went for the Embraer 110s and started to fly hoppers out of Chicago on routes below 300nm in the current Dawn of the Millenium #2.

Summary: The regional commuter model works for a red zero on the balance sheet with no room for expansion and C-checks will bring you to the knees.

+ Revenue Average Seat Kilometer 54.60 US cents on the best one
+ Load Factors of up to 85% on the best routes without marketing campaigns, neither general nor specific
+ Slot availability makes it theoretically possible to grow a regional airline for a long time during the game world

- Navigation fees: 800k for setting up four new routes below 300nm to petit airports (mainly slot costs at KORD)
- Average Profit (Income Statement) per week: 1-2k USD
- C-Check costs of around 100k every 12 months
- 16 pilots for 2 EMB-110s
- 127 staff for 2 EMB-110s
- total staff costs 44k per week

Conclusion:

The costly navigation fees make it possible to build up a regional commuter carrier despite game progress; however, the total impeding costs make it impossible to generate sufficient cash for orders. The C-checks are hugely costly and cannot justify the business model despite very high revenues per ASK. The staff requirements are overwhelming, considering we have 15 seats on each of the two aircrafts (e.g. 27 customer service).

From an aws-system point of view, I would recommend to lower the slots costs for small aircrafts significantly and reconsider the staff requirements. I believe the C-checks to be reasonable and the LFs as well.

In order to build a barrier for slot haulers, using small aircrafts at the beginning of the scenario (although this appears obsolete regarding the availability on current progress), I would recommend to introduce one-time costs when adding a new aircraft category, in my case adding a medium aircraft to the small aircraft.

Cheers,
Denis

[Razor2]

If the game mechanics have not changed since introduction of 1.2, its possible to build a regional carrier, but only with props...tried it with DHC-8s and F27s (later with Q400s), and succeeded...but even with those extremely fuel efficient aircraft you get the following problems:

- way too much staff
- slow expansion, compared to airlines using the standard equipment

thats why, everything under 35 seats is not economical and regional jets are unusable...

So what I told a year ago, still holds:
this game needs some tweaks for regionals, as currently there are not too many expansion models available besides the "frontal assault" with large jets.

[Curse]

From an aws-system point of view, I would recommend to lower the slots costs for small aircrafts significantly....

Exactly those aircraft made them this high. People use(d) to hog slots with them and some failed hard in DotM#2 due to the changed system, for example EarlJet out of EGLL, Mid Nippon Jetways out of RJTT, different airlines out of RJAA.

A regional airline out (and also not mainly into) class 5 airports isn't very cool and I think it's ok this attempt fails.


AWS is already a game where the biggest available aircraft can't be used. Try to open up an A300 airline out of a class 5 airport with competition. You're faster bk than you can blame the others B732 or DC-9.

Increasing advantages of smaller aircraft not only make big aircrafts like B747, A300 or later B757 and A321 useless, they also attack the smaller ones like B733, DC-9 etc.


To be honest in my opinion slot costs should be increased 50-100% as they are at the moment in DotM to stop the last slot hogging airlines around. ZBAA, LEBL, SBSP just to name three airports where it seems slot costs weren't high enough.


Edit:
It isn't done with a small tweak on just one point. The whole system must be changed to make regional airlines a good alternative in smaller countries or out of smaller airports in bigger countries while the whole system based on frequency as master value for LF must be cancelled.

At the moment in 99 out of 100 cases it's the only chance to stick to aircraft in the middle - not the biggest ones and not the smallest ones.

[ukatlantic]

A regional airline out (and also not mainly into) class 5 airports isn't very cool and I think it's ok this attempt fails.

I would agree with this in principle but there are some exceptions to the rules.  An example would be Jersey and Guernsey both used to have small regional aircraft operated by Air UK then KLM UK (F27 from Guernsey not sure but I think it was the same from Jersey) into Heathrow  (4 or 5 flight  a day if I remember correctly) until they closed the routes down citing lack of demand - which wasn't the case at all everytime I used to fly GCI-LHR it was a full aircraft as the Channel ISalnds are Tax Have...erm World Financial Centres! But the slots were more valuable for KLM to use bigger aircraft on from a higher demand route so it was lost.  Even today there is often talk of the Channel Islands getting these routes reinstated (If they could get/buy slots to use).  Even BMI used to operate the smaller 50 seat Embraer's into LHR a few years ago but again replaced them with larger aircraft type if memory serves me correctly.  So I dont think you could reject regional size aircraft in total but they would certainly be very limited numbers. 

[wapp11]

Look at Neo Citylink based at KSEA in MT4. He just added his first non CRJ AC... the dash 8. He is doing very well... Better than I did my first time around at KSEA with 737 classics lol

[d2031k]

CRJs are fine in the right environment, it just takes patience at the start.  This is in MT#4 too where fuel prices are sky high:

[attachment expired]

[ArcherII]

Yes, regional service is completely possible. But is harder than mainline in that you're paying the same you pay to operate a 156-seat A320, but with a 90-seat regional airplane. And I'm talking about staff costs, slots, Mx, and sometimes even fuel.
So the best way to run a regional carrier IMO is to stick to only one fleet type. Two fleets would reduce profit a lot, and three fleet types would kill you down the road eventually.
But I think that it is one of the funniest ways to play AWS.

[Tujue]

So the best way to run a regional carrier IMO is to stick to only one fleet type.

I definitely agree with you. I once operated an airline operating a huge fleet of E-Jets out of Izmir, Turkey successfully, the growth wasn't as quick as usual and sometimes I got bankruptcy warnings when I scheduled too many aircraft at once, but staying sticked to one fleet type saved my airline

[Jona L.]

Slot Hoggers, you

[DenisG]

I see folks, communication, communication, communication! We are using one word with many different meanings: Rushmore's test run was dedicated to a feeder or city-commuter airline, up to around 50 seats; he only used CRJs 100s/200s.

With regard to the wording of 'regional', I try to differentiate the following way:

Air Taxi Carrier
- up to 10 seats
- charter, freight, point to point, short-hauls
- not to be confused with VIP Taxi/Business Carriers

Commuter Carrier
- up to 19 seats
- usually no flight attendants, point to point, freight
- short routes, small airports

Feeder Carrier
- up to 99 seats
- usually with flight attendant, no point to point but hub system, freight
- mostly owned by major airline carriers; as the name suggests, objective is to offer connection flights

There are many different definitions and I do not opt for one of them because they tend to focus on the legal status, ICAO certification, and ownership, but not on the business model side, which I wanted to emphasize here.

From my definition point of view, I was refering to commuter carriers, not feeder carriers.

The conduct of a regional business model in the sense of 'feeder carrier' has never been a problem in AWS, since the beginning. If you have a route by yourself and you fly a 50 seater on a 40 pax route, you will be doing fine.

Rushmore's look at CRJ100s/200s had hence been focused on the particular cost structure, which made these aircrafts a financial liability during most scenarios in the past. I remember this one graphic in the aws-demotivators thread about CRJs and something like "...if you wanna bk in style..." This was Rushmore's focus with his test run, not a feeder model, which had always worked fine.

The particular problem we have been having since the first days of aws was the commuter business model. We usually have a bunch of aircrafts available on the used market in this segment and probably 60% of the possible routes within 400nm from most airports are concerned, but cannot be flown.

The problem with slot hoggers occurred mainly with aircrafts with more than 30 seats and only at the 10 biggest airports. With the much higher slot costs, the issue looks obsolete to me so far.

But my problem remains that I would love to fly a 15 seater Beechcraft from Heathrow to Brest and wave at Jona during takeoff who desperately tries to find parking positions for his 747s that he cannot get into the air... and then declare an emergency return and get his flight delays up. :-)

Cheers,
Denis

[Pilot Oatmeal]

Air Taxi Carrier
- up to 10 seats
- charter, freight, point to point, short-hauls
- not to be confused with VIP Taxi/Business Carriers

MU-2 .... 

[DenisG]

LOL, I love the Mitsubishi MU-2! When it lands, you look at it and always get the first thought that they must have lost the middle-section during flight...

[Pilot Oatmeal]

i guess you didn't see my post about the MU-2.... i was practically begging sami to put it in AWS... 

[Pilot Oatmeal]

haha try landing in one you start having back problems afterwards 

[thedr2]

I've operated a couple of feeder airlines over the years. They are completely profitable, but costs need to be watched much more closely. Choose fuel efficient aircraft over fast jets: i.e. Fokker 27, or in the modern games the ATR 42 is a good choice. I would also add that if you can, choose an aircraft with several different size versions inside its type. Like the ATR 42/72 and ERJ 135/145. This allows you to better meet supply to demand, while keeping costs at a minimum. There aren't many of these, so it's not always possible.

Feeder airlines would also make more sense if we had connecting traffic modelled. After all, thats what a "feeder airline" means.

My newish airline in Jet Age at the moment operates a profitable Fokker 27 fleet flying domestically in South Africa. It's actually propping up my medium haul operations with the 120 seat Bristol Brittania's, which are horrible, slow, fuel thirsty beasts.

[DenisG]

haha try landing in one you start having back problems afterwards 

Yep, sorry, hadn't seen it yet.

[DenisG]

I've operated a couple of feeder airlines over the years. They are completely profitable, but costs need to be watched much more closely. Choose fuel efficient aircraft over fast jets: i.e. Fokker 27, or in the modern games the ATR 42 is a good choice. I would also add that if you can, choose an aircraft with several different size versions inside its type. Like the ATR 42/72 and ERJ 135/145. This allows you to better meet supply to demand, while keeping costs at a minimum. There aren't many of these, so it's not always possible.

Feeder airlines would also make more sense if we had connecting traffic modelled. After all, thats what a "feeder airline" means.

My newish airline in Jet Age at the moment operates a profitable Fokker 27 fleet flying domestically in South Africa. It's actually propping up my medium haul operations with the 120 seat Bristol Brittania's, which are horrible, slow, fuel thirsty beasts.

Yes, that is what I wanted to emphasize: The feeder model had always worked perfectly fine in all scenarios. As Razor2 pointed out above, everything above 35 seats works well. So, F27s/F50s, ATRs, all do not fall into this category.

Cheers,
Denis

[Curse]

The problem with slot hoggers occurred mainly with aircrafts with more than 30 seats and only at the 10 biggest airports. With the much higher slot costs, the issue looks obsolete to me so far.

I respect your perception, but you are wrong on this.

In my first post I listed some airports where slot hogging failed and some where it worked. Where it worked are no Top10 airports - there slot costs are a bit higher and competition is bigger.

Further to this I'm sure if some competent player tries to slot hog at Heathrow this would also work, although not this good as in previous games.


And if the aircraft that hogs slots has 20 seats, 40 or 60 doesn't make any difference at the end of the day - all of them are later replaced with 757, A330 or 777...




Again, I don't get it why a commuter airline (for me everything with aircraft up to 50 seats) operate out of extreme slot limited airports when their only purpose is to become later big international airlines.
There's many space for commuter airlines out of smaller airports - why not try Belfast or Guernsey or London City instead of annoying people in and out of Heathrow?

[DenisG]

I respect your perception, but you are wrong on this.

In my first post I listed some airports where slot hogging failed and some where it worked. Where it worked are no Top10 airports - there slot costs are a bit higher and competition is bigger.

Further to this I'm sure if some competent player tries to slot hog at Heathrow this would also work, although not this good as in previous games.


And if the aircraft that hogs slots has 20 seats, 40 or 60 doesn't make any difference at the end of the day - all of them are later replaced with 757, A330 or 777...




Again, I don't get it why a commuter airline (for me everything with aircraft up to 50 seats) operate out of extreme slot limited airports when their only purpose is to become later big international airlines.
There's many space for commuter airlines out of smaller airports - why not try Belfast or Guernsey or London City instead of annoying people in and out of Heathrow?

Beijing/Sichauan City Flyer
- only airline at Beijing
- some highly competed routes
- IL-18 has 70 seats
- airline has already 85 a/c

Barcelona/JetCity
- only airline at Barcelona
- many highly competed routes
- airline has 108 a/c

Sao Paulo Garulhos/Air Brazil
- high competition
- airline has 99 a/c

They have good order pipelines, good company values, and do not overfly on any routes. With regard to competition: Frequency wins. And I also use this technique to beat competition.

Compared to the slot hogging we have seen at other airports in the past, I do not see any attempt here, but three airlines with strong and fast growth, that's all. If you have the cash, why not take some planes from the used market in order to enhance growth, profits, and order pipelines.

If I decide to fly a 250pax route with 5 F27s instead of two B737s, I cannot see how this may effect me being too close to the line. If my strategy is to later switch on long-hauls, that is perfectly fine in free market economies.

The commuter business model can be based at small airports, providing regional travel; but it may as well be located at large airports, historically, where they try to provide services for daily business travelers.

There is no finite obligation that if you choose Heathrow, you are obliged to fly long-hauls. And even from a business point of view, I do not see a commuter business model in any sense disadvantaged or boring compared to major carrier operations. It is free competition and it may change the competitive environment, leading to other airline having to adjust their strategies; but that it what this game is all about.

I agree with you that it is worth a critical thought, whether an airline secures slots first and then tries to become a big player. But on the other hand this is how competition may work, not only in the airline industry; I would really like to work a commuter model only. for an entire game. This is my case.

Cheers,
Denis

[Curse]

The problem is, frequency wins always.

These three airports were examples for my opinion slot costs aren't high enough - as answer to your statement they are too high.

It's not my wish to make the business model of using endless small aircraft not working anymore. But I don't see a point why pax should prefer an airline, that flies 40 times a day with F27 to a destination over an airline that flies 5 times a day with B734 for example.

At the moment one is forced to be geared to the smalles aircraft a competitor uses. If he uses F28, I must use F27. If he uses F27, I must use F27 as well or find something even smaller.

With your ideas this would be even more common than it's now, making even more big aircraft obsolete than now (compete with B727 vs. DC-9? In AWS not a good thing and even B737-200Adv have problems with it's higher seating).

On one hand you talk about historical commuter airlines out of big cities, but on the other hand the most famous aircraft in aviation history can't be used often enough at AWS.


That is, as I said before, a general problem that can't be fixed in five minutes between two beers. High slot costs are a solution - they slower expansion of airlines in general, but small commuter airlines aren't affected this hard as long as they don't fly out of a top airport.


I hope I could explain what I mean good enough. At the end we both want the same - unlimited opportunities and success with every possible business model.