Noob Question about starting up

[Chaxterium]

Hello All,

I have a newbie question for you although I've been playing for a while. Out of all the airlines I've operated only one has been successful. Fortunately it was very successful but I haven't been able to find that magic again.

When starting up an airline with a fixed amount of money, typically how many aircraft do you need to compensate for the overhead costs? Currently I have three aircraft (all the same type, I'm not THAT much of a noob!) and it looks as though I'll be making a small amount of money, at least until my lease fees start kicking in. I'm debating whether I should add another aircraft or two or just wait and be patient. My concern though is that if I wait and stay patient and find that I'm not making money I'll lose the capital I have and I won't be able to add any more aircraft to cover my costs whereas right now I could afford to add one and possible two. Am I making sense?

Anyway. Thanks for any help you can offer!

Cheers,
Chax

[Sami]

Depends on the size of the plane and routes. For midsize jets 2-3 is usually needed to break even.

Expand if you have routes to fly, but be sure to keep a cash reserve.

[Chaxterium]

Thanks for the response Sami. That's more or less what I thought and I'm sitting with 4 midsize jets right now and I'm making a bit of a profit. I'm hoping my profits will continue to grow to cover the costs of my leases once they kick in.

Regarding ticket prices then I've seen that it's a good idea to drop your prices initially when starting up to attract more pax however there's always a warning to return the prices to default once you're established. Doesn't this cause the pax to get upset? Aren't you going to see lower LFs or is that expected? Do pax become 'accustomed' to your lower prices?

Regards,
Chax

[exchlbg]

PAX in this game don´t have a mind or a memory, they are coded to correspond to actual offers regarding prices,RI and CI and other variables.
As your CI and RI grow, PAX will accept higher ticket prices, especially if there is no competition. With the new distribution system (effective in MT7/NAC and all still to come scenarios) they even will accept prices higher than default if circumstances allow. So you will always have to keep an eye on pricing.

[Chaxterium]

Fair enough. So then if I'm starting a route that currently has no competition I shouldn't lower the prices since the pax will pay it?

[exchlbg]

Just at starting a new route it might be helpful to lower the fares, because your RI starts with 0, especially if you are a new airline with a low CI. It´s worth experimenting a bit, to see how PAX react.
With the new system people are more sensitive about prices but also RI and CI, so filling up your seats takes longer than before.
You have to expect losses at company start, so don´t spend your money too fast ! Don´t forget marketing but don´t overdo it.

[Chaxterium]

Thanks again! Exactly how important is marketing? I haven't forgot about it as I have a general campaign going on right now and my CI is creeping up but is it worth putting a lot of money into it?

Also I'm up to 5 aircraft now and I've been keeping a close eye on my profit margins and before adding the 5th aircraft it looks as though I should be keeping my head above water even when the lease payments kick in. Hopefully as the RIs keep coming up I'll start seeing higher LFs and my profit margin will grow.

Regards,
Chax

[exchlbg]

As a rule of thumb your marketing should be 10% of income at the beginning. If your CI stops rising, you´ll need more.

[AndiD]

... or keep the CI at 20, 30, 60, etc. depending on the kind of airline you are running.

I tend to be stingy on marketing expenses and it does serve me well, I think.

[Chaxterium]

Yeah I'm pretty sure that with my last successful airline my CI was hovering around 20 and it didn't seem to affect me. I was making a ton of money regardless. The bang for your buck with marketing seems way too harsh.

[exchlbg]

It depends on competition situation and what kind of airline you are running.
A regional airline without much competition and no C/F PAX doesn´t need high CI indeed. LH C/F needs much.