Passenger demand question

[qunow]

I have been looking at one of the route in my network and is interested in the passenger demand distribution.

The two leading airlines on the route are Westland and Nordic, each taking about 25% market share, while my own airlines Interworld only occupied about 16% of the market.
However, from the schedule:

It seems that I have offered more flights than eitiher of the market leaders on the route, and other than the 1205/1300 departure, all other flights are relatively reasonably spaced.
However, all of my flight on the route are still having only around 20-30% load factors, and the larger equipment used by those other airlines seems to be getting better load factors. Why is that?

[DannyWilliams]

I think it's modeled so that pax takes travel time into consideration too, not a 100% sure though but it would make sense looking at the distribution on that route. 

[freshmore]

I would guess, given my maths says you are running HD configurations in both you F.27's and L649's, it's down to them running Standard seating. This gives a better comfort level for the passengers and is the biggest change that gives them a big advantage meaning they will pick up more pax over people running HD configurations very easily.

Speed does have some effect, but it's not as big as you might think. It's not really an effect here because Westland is running slower (or similar) equipment on the route, I would think probably less capacity and higher market share from it. So that suggests better comfort levels, that or some serious price war is going on.

Change one of the F.27's from 48 to 40 configuration and see if it changes anything, if that doesn't make a decent load change, more likely someone has steep price discounts.

[schro]

The market share graph is generally a very poor representation of how well you're doing as it has a 2 week lookback and is heavily influenced by B/C/D checks and flight cancellations.

Rough math - 23 frequencies, 600 demand = most things equal 26 seats sold per flight. Is that about what you're selling?

Your marketshare would imply you're selling about 13 seats per flight....

[qunow]

The market share graph is generally a very poor representation of how well you're doing as it has a 2 week lookback and is heavily influenced by B/C/D checks and flight cancellations.

Rough math - 23 frequencies, 600 demand = most things equal 26 seats sold per flight. Is that about what you're selling?

Your marketshare would imply you're selling about 13 seats per flight....

The load factor remain like this for a rather long period of time. And yes that's abput as much sales I am making per flight

I would guess, given my maths says you are running HD configurations in both you F.27's and L649's, it's down to them running Standard seating. This gives a better comfort level for the passengers and is the biggest change that gives them a big advantage meaning they will pick up more pax over people running HD configurations very easily.

Speed does have some effect, but it's not as big as you might think. It's not really an effect here because Westland is running slower (or similar) equipment on the route, I would think probably less capacity and higher market share from it. So that suggests better comfort levels, that or some serious price war is going on.

Change one of the F.27's from 48 to 40 configuration and see if it changes anything, if that doesn't make a decent load change, more likely someone has steep price discounts.

Ah right seats. Guess that could a factor. Might be I can look at other their routes to guess their config

[gazzz0x2z]

Price wars can be dangerous. If you don't fill you planes, changing seating is a no-brainer. Once you're at normal(don't go to better than normal, the gains is negligible, usually), then be very careful. It's tempting to lower prices, but most of the time, it's a lose-lose decision. Your opponent is losing sales, and you're losing money. You're losing money because it's more juicy to sell 30% at 80$ than 60% at 30$(tested with my CV240, a plane very similar to the F27).

You may still try to lower prices on some routes, but be sure to check if your profit actually increases. It happened to me to raise prices at 45%LF, and make more money(especially in GW3 in Warsaw, where my 737 are tortured by CRJs). If your prices are low(i.e. not over standard price), your seating is normal(or better), and your market share is not what it should be(26 seats per flight, as computed by others), then it means someone is leading a price war. Someone is losing far more money on the route than you do. And that's a good thing for you. Let him/her kill him/herself.

[qunow]

yeap load factor almost doubled with better seats

[DannyWilliams]

yeap load factor almost doubled with better seats

But did you actually sell any more seats? I am just asking since you now have to sell less seats than before so your loadfactor increase might just only be because of less seats available on the flight...

[qunow]

But did you actually sell any more seats? I am just asking since you now have to sell less seats than before so your loadfactor increase might just only be because of less seats available on the flight...

ah right I forget I now have fewer seat on the aircraft... what I mean is actually, the number of seats sold have been doubled. The load factor increase rate is actually more than that.

Edit: However... the increase only last for 3 days. After that the load factors falls back. Seems more likely to be the effect of some other temporary factors than actually caused by seats upgrade..

[gazzz0x2z]

so it was just a coincidence. Which means that someone is actually pricewarring you. Let this company kill itself and be patient. There are 23 flights.

Express air has 4 flights, he should have 17% of traffick. He is at 16%
NorthWestern has one flight, he should have 4% of traffick, he is at 7% ==> He's on price wars.
Interworld has 7 flights, he should have 30% of traffick. Maybe 29% with the small overlap between 1205 & 1300. he is at 21% ==> He's making money.
Westland has 4 flights, he should have 17% of traffick. He is at 27% ==> He's on price wars.
Canadien has 3 flights, he should have 13% of traffick. He is at 13%
Air Nordic has 4 flights, he should have 17% of traffick. He is at 14%

so as you are interworld, you are probably the only one making small money on this line. Others are probably not far from red, or maybe even in red. 27% market share when your normal market share is 17% means massive price wars. Which is completely useless when you're not dominant on the line. It costs them probaby 5-6$ to reduce your income by 1$. Don't fall in their trap. Let them bleed money. be patient.

[yearofthecactus]

so it was just a coincidence. Which means that someone is actually pricewarring you. Let this company kill itself and be patient. There are 23 flights.

Express air has 4 flights, he should have 17% of traffick. He is at 16%
NorthWestern has one flight, he should have 4% of traffick, he is at 7% ==> He's on price wars.
Interworld has 7 flights, he should have 30% of traffick. Maybe 29% with the small overlap between 1205 & 1300. he is at 21% ==> He's making money.
Westland has 4 flights, he should have 17% of traffick. He is at 27% ==> He's on price wars.
Canadien has 3 flights, he should have 13% of traffick. He is at 13%
Air Nordic has 4 flights, he should have 17% of traffick. He is at 14%

Disagree with regards to bolded. 7% is about what I'd expect for a single flight operation, very unlikely the result of price manipulation.

[paddk989]

Can I ask, when determining the percentage of the pie chart you expect to have, is it solely based on the number of your flights, or is it percentage of seats you have compared to total supply of seats.

[gazzz0x2z]

Solely on the number of flights. Of course, if you cover 50% of flights, but only 25% of demand, you won't get 50% of demand in terms of sale. Still - planes on this lines are all big enough. Which means size does not matter, in that case.

[carrisi]

Is it me, or does price not really affect demand that much?

Every time I have tried to start a price war by completely slashing prices (like in the real world) I have never filled empty seats. It strikes me that customers should be way more price sensitive.... In AWS, it seems that customers are more departure/arrival time sensitive than price sensitive...? My airlines have always made good money in AWS due to this lack of price sensitivity - but it would be nice to see airlines being able to buy market share with price, not frequency... that way the most efficient airlines would be rewarded.

Thoughts anyone?

[qunow]

Is it me, or does price not really affect demand that much?

Every time I have tried to start a price war by completely slashing prices (like in the real world) I have never filled empty seats. It strikes me that customers should be way more price sensitive.... In AWS, it seems that customers are more departure/arrival time sensitive than price sensitive...? My airlines have always made good money in AWS due to this lack of price sensitivity - but it would be nice to see airlines being able to buy market share with price, not frequency... that way the most efficient airlines would be rewarded.

Thoughts anyone?

Different travellers have different priority. While most leisure travellers would take whatever flight that are available at the cheapest price, most who travel for business or other reasons would be willing to pay considerably more for a flight that fit their schedule better

[DannyWilliams]

Different travellers have different priority. While most leisure travellers would take whatever flight that are available at the cheapest price, most who travel for business or other reasons would be willing to pay considerably more for a flight that fit their schedule better

That said i did slash my prices on all flights out of Oakland for a month back in 1959, i noticed a HUGE change in LF on the bigger destinations...

[gazzz0x2z]

Overall, price wars are half effective, I'd say. In other words, you're not going to kill a healthy opponent. A wek opponent, OTOH..... But it often costs you 5$ to cost 1$ of income to your opponent. In even other words, it mainly works against companies that are doomed anyways. Unless you are very big and the target very small - in which case it's forbidden.

[freshmore]

Price I think will come more into it when City Based demand comes along, because I think that will split the travellers up into different groups more, that's if my memory serves correctly.

Currently, starting or getting drawn into a price war is pointless, a well run airline, big or small, will only be adversely affected and likely neither will likely go bankrupt. It's better to leave prices alone unless you are going to raise the prices on routes with high Loads.

As gazz says, a company that bankrupts was probably doomed anyway because of other reasons that are more to do with their management than anything else, coupled with the consistent pressure of the competition in game, often it's only a matter of time.

[qunow]

Price I think will come more into it when City Based demand comes along, because I think that will split the travellers up into different groups more, that's if my memory serves correctly.

I believe you are describing another system from another game very similar to what we are playing here.

[freshmore]

I believe you are describing another system from another game very similar to what we are playing here.

I'm afraid I'm not aware of how other games work, the only time I did play another was before AirwaySim entered official Beta.

I'm sure Sami has mentioned this either in official descriptions of the system or in replies to discussions relating to the system. Or at least that might be how the system is intended to work in the long run, I can no longer remember what exactly, but I'm sure I remember something about it. Certainly the economic model would seem to allow it, Business pax of course would be less price sensitive than economy pax.

As for now, lower prices doesn't do much, better to optimise the routes by raising prices.