At what point is an Airlines forced into Bankruptcy?

[swiftus27]

In game #1, there is an airlines that is 110 million in debt.  At what point is the game going to simply boot the player?

[swiftus27]

bump... no answer? 

The airlines in question is now 130 million in debt... does anyone care to explain?

[Kontio]

I don't think it matters how much in debt the company is but for how long. In the first bankruptcy warning it says something like you have 6 real days to get out of debt.

[swiftus27]

6 human days to get out of debt? 

I don't know what this person is holding on for... he is now 160 m in the red.

[tacsniper]

I thought when you can no longer pay for maintenance, you are pretty much doomed. Cause if your maintenance are not up to date and a ramp check comes, you are fined and you LF drops and you don't generate a profit anymore. At that point I don't see why you would want to continue playing and not declare bankrupt and restart the game.

[Dazwalsh]

there is always the bank loan option if you find yourself in the red.

[Pike]

there is always the bank loan option if you find yourself in the red.

No, you can't take a loan if you are in the red.  It's based on the amount of cash you have, so if in the red....

Swift.....this was covered in another topic.  The search button is your friend. 

[Sami]

It's based on the amount of cash you have, so if in the red....

Based on airline value actually.

[swiftus27]

https://www.airwaysim.com/game/Info/Others/Airline151

https://www.airwaysim.com/game/Info/Others/Airline260

I can speak for AAL where I have been watching the airline be in debt for 2 calendar days now.  How can they keep playing when they have been in debt for so long?

This may be a game change necessary.

[KAH]

https://www.airwaysim.com/game/Info/Others/Airline151

https://www.airwaysim.com/game/Info/Others/Airline260

I can speak for AAL where I have been watching the airline be in debt for 2 calendar days now.  How can they keep playing when they have been in debt for so long?

This may be a game change necessary.

Remember when looking at airline values that it's value = assets + cash - loan

So if an airline has valuable assets (ie. owns planes) or has a lot of cash, they can still be doing ok even if the value is negative.

The tresholds for forced bankruptcy are explained in this post by sami - if these airlines start losing money, they will be liquidated. But now, they are obviously making enough money to have a positive cash balance large enough to keep paying for maintenance, salaries etc (the pax graphs look healthy) and to pay the bank interest.

[swiftus27]

To clarify, I have a master's degree in business.

Its assets - liabilites that equals net worth....
This game does not account for "goodwill" or "prepaid liabilities" which are considered to be assets. 


The companies I listed have a negative value.  They own 1 plane or 0 planes.
The only way to be that way is if they are in cash debt.
I just want to know at what point it is Game Over.

[KAH]

To clarify, I have a master's degree in business.

Its assets - liabilites that equals net worth....
This game does not account for "goodwill" or "prepaid liabilities" which are considered to be assets. 


The companies I listed have a negative value.  They own 1 plane or 0 planes.
The only way to be that way is if they are in cash debt.
I just want to know at what point it is Game Over.

This isn't real life, real life definitions do not apply directly. Everything is really simplified to make the game more playable.
I think it's pretty safe to assume that the definition I gave is how value is defined within the game.

Read the post I linked, it answers your question. As to the examples you gave, again, look at them within the context of the game and it's mechanics, not real business law.

Presumably, what confuses you is that the loans in AWS are given on incredibly generous terms - you only need to pay the weekly floating interest plus the management fee, and only your current value is factored in as a risk.

Those airlines must have some cash on hand since they are obviously paying for maintenance (you'd notice the pax numbers dropping if they were short of cash to pay C checks and stuff). I'm guessing they just took up huge loans to fund fast expansion programs and are now taking a long time to repay their debts.
As long as they still turn a profit, the AWS bank is happy and doesn't worry much about it's credit

[swiftus27]

While I appreciate the information, I must disagree with you to some extent:

If AAL has a positive amount of cash, I will be shocked.  Since I have started tracking this airline, I have seen the value go down.  It is currently -12 million on Sunday and up to -16 million on Wednesdays.  For them to have cash on hand to pay their debts coupled with the fact that they own only 1 plane (and its value is maybe 2 million), there is only one logical conclusion if what you state is correct:  They've had a large loan out for a really really long time.   With their net income being routinely negative, something must be going on.

I just wonder what this airline is going to do when some of those 727s come due for some maintenance.  I just took 7 744s down for C checks and that was brutal.

[swiftus27]

The airline is now 21 million in the red.  They are still moving passengers. 

Still no real explanation.

[Seattle]

Does it matter? They will be gone eventually.

[swiftus27]

Does it matter? They will be gone eventually.

Sure sure... I agree.  I just want to know how this company is still going.  That's it.

BTW, AAL is now 31 Million in the red now.

I was told to read a post from Sami that says the following:

"Conditions are: negative financial result for last 30 days, more than -5mil cash OR airline value less than -5 mil"

I have no idea how this company is still alive.  Value is less than neg 5 million and has been for over 3 human DAYS.  I am sure cash is under neg 5 million AND neg financial result for last 30.

[Sami]

That is the WARNING threshold you quoted. From the warning the player has the 4-8 days (or something, depending on the condition) to raise it back to plus.

So when those conditions are met, the warning is sent and from that point he has approx a week to salvage it.

[swiftus27]

I figured out the way this guy is still gaining passengers.

"credit" means can be paid for even if you have no money

1.  He ordered some planes before he was broke
2.  Setting up new routes can be paid on "credit"
3.  A B C checks can be paid for on "credit"

Basically, this guy is being given a LONG lifeline of a calendar week to pull it back to profitability...  This could be used as a weapon as well and here's how:

1.  Player doing well owns a bunch of planes
2.  Player 2 leases from Player 1 for as cheap as possible (he has to do it quickly, I know)
3.  Player 2 flies the lines of whoever he wants to compete with for as cheaply he wants to
4.  Player 2 walks away for a calendar week.
5.  Player 2 comes back to the game a week later automatically put into bankruptcy
6.  Player 2 either starts again or gets some game tokens back to do it later.

This is a serious issue to me.  It is an obvious way someone who double accounts can literally dominate a game.

[Sami]

Double accounts are not allowed and this issue is being monitored.

[woober]

My company is forced in to bankruptcy aswell, even if I payed down all loans and my credits are now in plus. Get 2 new planes in a few days, but they are not been charge yet, so why do I still get bankruptcy?