Route Demand Newbie Questions

[Karl]

A route with a demand of only 40 or 60 seats seems like a stretch for a 737 or an A320.  

Can demand grow on a route?    

Will demand grow over time to make this investment worth while?

If there is competition on a route, and there is over capacity, will demand eventually grow?

Will marketing help?

[LemonButt]

Demand will grow, but Beginner's World isn't long enough to notice any real changes.  You can successfully run a 737 or A320 on these routes assuming they are short hops without competition.  Shorter routes have higher margins than long ones, so flying half empty on a 100nm route can be profitable whereas it may not be on a 1500nm route.

Competition on a route is not related to demand growth.  Marketing won't help either.  The only way to increase it is by lowering ticket prices, which will lower your profits since load factors do not increase enough to make up for the reduced prices to result in a net increase in revenues.

[Karl]

Competition on a route is not related to demand growth.  Marketing won't help either.  The only way to increase it is by lowering ticket prices, which will lower your profits since load factors do not increase enough to make up for the reduced prices to result in a net increase in revenues.

Then, it does not make sense for a competitor to add flights to one of my saturated markets or for me to add flights to another airline's saturated markets, right?   

It would be better to find an open market, right? 

[Sanabas]

It would be more profitable in the short-term to find an empty route. I don't think that's automatically better though.

[LemonButt]

Then, it does not make sense for a competitor to add flights to one of my saturated markets or for me to add flights to another airline's saturated markets, right?   

It would be better to find an open market, right? 

It is more profitable to fly a route without any competition versus one with competition.  However, it is inevitable that you will grow to the point where competition in neccessary.  Additionally, frequency is king.  If a competitor is flying an 800pax route with an A380 1x/daily, you could really do some damage by flying an F100 8x/daily and really hurting your competitors load factors.  The bottom line is the smaller the plane and the higher the frequency, the better.  If you're competitor is not flying routes with the right aircraft, you can make them lose a lot of money through competition.

[Karl]

If you're competitor is not flying routes with the right aircraft, you can make them lose a lot of money through competition.

Yes, but does the competitor have the common sense, the ability, or the desire to make changes to a route?   I find that in a simulation like this, some airline CEOs just build and let fly.  Half the fun, for me at least, is spending time to analyze and them make sound business decisions.

[lunchbox]

Absolutely,


In the other game worlds, in most instances you can tell who is a newbie, and who's been doing this for a while.

For example, I was doing a long haul experiment from Seattle to Paris, and all the sudden, one of my competitors out of Seattle started frying the route as well.  I returned later that day to discover that my competitor moved off that route, because the big competitor out of Paris started flying the route.

Another example is a route from Seattle to Reno, about a 500nm route.  There are 3 airlines flying that route, one airline is using a B743 for a 1x daily flight, and the other two are using B737's for 2-3x daily each.