is using three fleet groups probitive financially

[paddk989]

I operate at present 2 fleet groups, 1 of 28 planes and the other of 24. the leases on the 28 plane group were all for 5 years or less and the leases will soon finish. I would like to replace these planes by leasing new airframes of a different type. My question is can I remain solvent with having 3 plane groups in operation for about 3 game years. Another question concerns company image. I use an additional 30 minutes to turn time now to minimize delays. The fleet condition is above 90%, and am using 2 permanent company advertising campaigns. The staff option I have selected to be automatic. The problem is my company profile is poor compared to the majority of airlines. I routinely use the extra maintenance facility each real day to improve the planes condition. Could doing that, and having planes cancel flights be the reason for the poor company image. Thanks for your time.

[schro]

A third fleet group will be fine - it's the fourth that's generally an arrow to the knee.

First - Assuming your planes are all in good shape (80% and above), then you should NEVER have to use extra maintenance. Doing so will simply waste your money as condition will fluctuate with use (but always stay high enough to avoid a high level of delays). The only time you should use extra maintenance is when you acquire planes that are below 80% condition, as that's the threshold where technical/mech delays go hockey stick and start to impact you.

Second - Padding 30 more minutes of turn time is not a good way to utilize your assets unless it's done to plan for a future fleet transition (i'm thinking DC8/707 to DC10, specifically). You will ALWAYS encounter randomized delays no matter what you do from a timing/condition perspective. I typically aim for about a 10% estimated delay probability and I do just fine with my small regional airlines.

As far as delays impacting CI, generally if you are better than 80% on time and cancel less than 2% of your flights, then there will be no impact to your CI (no impact meaning delays/cancels can only deduct from your CI and NOT improve it).

The only way to increase CI (assuming you aren't doing anything that will cause deductions) is to spend more on general marketing campaigns. Even then, it will increase fairly slowly. Aim for 5-10% of revenue while it is growing until it levels off where you want it.

[paddk989]

Thanks for your comprehensive reply Schro. Very informative. I will act on your advices. Thanks for your time.

[gazzz0x2z]

Just had a look at your company in GW2 : 96% of punctuality. It's nearly too much. Flying equipment is costly to own, that's why it's important to push it to limits, to use it to maximum. While not as extreme as Schro, I'm playing with turnaround times, usually squeezing them. A DC3(I see you have 5) has a minimum turnaround time of 25 minutes, and is at 1% of problems at 45 minutes. I don't use more than 40 minutes of turnaround, sometimes even less. And it's enough. The idea is not to push to the limits on each flight, only on those that allow a really better scheduling.

I also see that you have 91% Load factor. You're not milking your passengers enough. You should be at 85% overall, maximum. You probably have several lines at 95% or even more in terms of Load factor. Your passengers don't pay enough money. You deserve more bucks, and need them for expancing your company. Finally, you have 15 of company image. It's a little bit low, even for a small company as yours. Without going to far, you might increase your company marketing a little bit. It would help you raise your ticket prices even higher.

[paddk989]

Thanks Gazzz. The point you raise concerning the relationship between load factor and ticket pricing is priceless info. When I read that line, I immediately thought it is simple economic logic, but in my case, not seeing the wood for the trees. Informative replay, many thanks

[gazzz0x2z]

Of course, 85% is an abominative simplification. Be sure to toy a little bit, and to take notes of what works, and what does not. The exact number of parameters implied is huge. 85% is ideal for a normal plane with normal seating covering roughly all the demand. With high-density seating, you might not want go under 90%, or sometimes even under 93% - LF drops fast quicker with prices on high-density seating. Conversely, on lines with a lot of opposition, it may happen that at 40% load factor, you're still underpriced, and you'd make more money at 35% load factor - but with tickets 20% costlier.

It also depends wether you want to make one simple price setting, or micromanage your lines. In the first case, 85% is accurate enough. In the second one, usually not.